Financial Wellness @ Work

How to Invest for Income When Rates Are Rising

One of the biggest challenges facing current and future retirees is shifting from investing for growth to investing for income. This is especially difficult in today’s environment of low and possibly rising interest rates. Let’s start by taking a look at some options for getting investment income in retirement:  Read more

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Should You Invest in a “Motif?”

A friend of mine recently asked me what I thought of a site called Motif Investing. The idea of the site is that it allows you to buy a basket of up to 30 stocks or ETFs based on an idea or “motif.” Some popular examples are stocks benefiting from things like the rise of 3D printing or biotechnology, stocks  that have recently suffered a sharp decline, or stocks with good dividend payouts. The weighting of each motif can be customized and individual stocks or ETFs can even be removed. It costs $9.95 to purchase, sell, or re-balance each motif. So is this a good way to invest in stocks? Let’s take a look at the pros and cons: Read more

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Have You Outgrown Your Mutual Funds?

When it comes to investing, many of us stick to mutual funds. After all, they’re generally the only option in employer retirement plans (except perhaps for company stock) and financial advisers like to sell funds because they’re relatively easy for them to manage. They also make a lot of sense when you’re just starting out with investing and don’t have enough to purchase in individual securities. However, as your portfolio grows, you may want to consider purchasing individual securities, especially if your portfolio is taxable. Here are some reasons why: Read more

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All in the Family: Intra-Family Loans

The current low level of interest rates can be either a bane or a boon, depending on your perspective. If you are in the market to borrow for a major financial purchase or investment and have decent credit, the situation is looking mighty good. New car loans are running between 3 and 4 percent, mortgages are now as low as less than 3%, and some federal student loans have again been pegged by Congress at 3.4 percent. Read more

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A “Must Do” If You Hold Company Stock in Your 401(k)

The bottom line is employees must love the companies they work for.  It’s not that they wear the company t-shirt and logo hats and drink out of their insulated mugs. That isn’t how I can tell.  It’s in their portfolios.  When they ask me to review their portfolios, the employees who hold company stock tend to go overboard.  I’ve seen 401(k)s with 90% in company stock and many have well over 20%.  When we talk about the risks of having more than 10% of assets in one stock, they smile politely and say, “I know.”  But many don’t do anything about it.  Read more

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When Enough is Enough

After my stepfather passed away, my mom started working with a local bank to manage her investments.  At the time, I was living in California and it was difficult for me to help her with investment decisions.  Plus, I had always warned my clients that allowing family members to get involved in your investments was a bad idea because you could always fire a stranger but you can never fire a member of the family.  It was with this in mind that I allowed her to continue this relationship despite my occupation as a financial planner. Read more

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How to Turn Your Investment Lemons Into Lemonade in the Next Two Days

We usually wait until April 15th to worry about taxes, but the time to do something about them is mostly well before that. Some examples include contributing to your employer’s retirement plan and flexible spending accounts. But there is also one thing that you can do right now if you have investment losses outside of your retirement plan.(I know I do and if you have any taxable investments, you probably do too). Here’s how you can turn losses into extra cash on April 15th: Read more

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The Truth About Target Date Funds

I read this article on Bankrate.com about investors’ belief that target date funds come with a guarantee of a sufficient retirement income. The statistics are a little bit startling (51 percent — of people investing their retirement savings in target-date funds see them as a retirement planning panacea and think that putting their money in them guarantees their retirement income needs will be met), frightening even, from the perspective of a financial planner. The conclusion of the article is: Read more

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A Bear Market is Your Friend

A friend of mine posted this comment on Facebook last week “Yeah!  The market is up 345 points! Finally it is going in the right direction.”  Well, I was NOT happy at all to hear this news.  You see, that day (Thursday October 27th) was the day our company made its annual contribution for all of our employees – the employer matching contributions to everyone’s 401(k). I was certainly happy to receive a company contribution but not so happy about the timing. Because mutual funds pick up the end of day pricing, that means everyone in our company received a contribution to their 401(k) AFTER the market went up that day.  If the contribution had been made a day earlier, all of us who invest in stock funds would have been over three percent richer. Read more

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3 Smart (and Not So Smart) Tax Decisions by Retirees

In my blog last week, I talked about how looking at the future of tax policy may be an interesting hobby (especially if you’re a geek like me!), but that it really isn’t all that useful in the present.  But, there are things that are important to look at when it comes to today’s income tax situation.  I don’t want to minimize the impact of paying attention to taxes; it’s just a matter of learning which situations are high impact situations. Read more

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