Rules That Are Meant to Be Broken

May 10, 2013

It looks like the FAA may relax the rules on what types of electronic devices you can use while the plane is zooming down the runway about to take off. I’m not sure it would have helped Alec Baldwin continue to play Words With Friends a little bit longer and avoid that confrontation, but it might make a lot of people (including me) happy. I’m a big fan of reading and my favorite thing to do on flights is to read. And lately I’ve been reading more on my iPad, using the Kindle app and my local library’s e-reader checkout program.(Bonus tip: For those of you who love to read, check out this link to Overdrive, which is the program I use to check books out of my local public library for free rather than buying the book via digital download. It’s a great money saver!) Sometimes, there are rules that need to be updated in order to keep up with the changing world. Here are a couple of rules with your financial life that you might want to consider updating. Continue reading “Rules That Are Meant to Be Broken”

Does the 401(k) “Suck?”

May 09, 2013

A friend of mine recently sent me an article titled “It’s a 401(k) World and It Sucks.” I realize that the 401(k) is not perfect (but what is?) and the author does make some good points. But that being said, “sucks” is a pretty strong word about the vehicle that has encouraged more retirement saving than anything else, especially considering how much we need to increase those retirement savings. Let’s take a look at each of the author’s main arguments: Continue reading “Does the 401(k) “Suck?””

The Secret to Creating Wealth From Your Paycheck

March 18, 2013

Robots have replaced many jobs that people used to do. Luckily, they haven’t replaced all of them but there is something to be said for programming a robot to do a job. They just do what they are told. They don’t have to make decisions. We can actually learn something from our plastic and steel computerized robot friends about wealth building. Take the human component of decision making out of the equation to have more cash and more income in retirement. Continue reading “The Secret to Creating Wealth From Your Paycheck”

The Risks of the Self-Directed 401(k) Brokerage Window

February 19, 2013

Does more choice offered through a self-directed brokerage window lead to better asset allocation for 401(k) participants? Based on what I’ve seen over the past few weeks, I’d have to say no. Having almost unlimited investment options can sound appealing to some employees, but unfortunately in many cases the employees are not putting in the time and effort they need to manage their accounts. Continue reading “The Risks of the Self-Directed 401(k) Brokerage Window”

Three Common Retirement Questions You Need To Ask

January 28, 2013

Do you want to retire this year? Next year? Do you want to retire sometime soon? Continue reading “Three Common Retirement Questions You Need To Ask”

Happy New Year! Three Financial Areas to Focus on in 2013

December 31, 2012

Today is the last day of 2012. Tonight you will pop the champagne cork and pull out the glasses to toast “out with the old and in with the new.” Whether you are dressed in your finest sequins and rhinestones or your best suit or you are comfy cozy watching the ball drop from the comfort of your living room, you just can’t help to think about new beginnings. Tonight we shed the old and begin anew! Continue reading “Happy New Year! Three Financial Areas to Focus on in 2013”

How to Find an Extra $2 Million in Your Coat Pocket

December 21, 2012

A few things happened today and somehow when I pieced them together, it all made sense (to me, at least). As I was putting my coat on this COLD morning (for the first time in nearly a year), I found a $20 bill in the pocket. Talk about a great way to get your day started!!! I was thinking that it was going to be a good day. Continue reading “How to Find an Extra $2 Million in Your Coat Pocket”

5 More Ways to Boost Your Retirement Savings and Retire Early

November 12, 2012

It’s not so much how much you make; it’s what you do with what you make that can help you create wealth. Case in point, a friend of mine just retired at age 53. In today’s economy, retiring early is tough to do – virtually impossible—yet she did it and her husband has never had a “regular job.” She worked as an administrative assistant at the University of California in Davis, California. Without a college degree, she never earned six figures but what she did earn, she and her husband saved. They were very frugal and what they saved they invested in rental property, which he managed, as well as in her 401(k). I love reading her recent Facebook posts sharing things like “It’s a rainy day and I don’t have to go into work!” She and her husband achieved financial freedom and so can you. Continue reading “5 More Ways to Boost Your Retirement Savings and Retire Early”

What to Do With $100,000 in Today’s Economy

October 29, 2012

I actually get this question quite a bit on our financial helpline and in our worksite financial planning sessions, not so much that someone got an inheritance (though I did get that last week), but many people simply want to know how they should allocate their assets in their own 401(k). The question doesn’t have a quick and easy answer and answering involves asking a series of questions first because investing starts with you – the investor. Obviously, an aggressive investor is going to have a very different investment mix than a conservative investor. A fifty year old may have a very different investment mix than a twenty year old no matter what the current economic outlook. Here are some questions I always start with: Continue reading “What to Do With $100,000 in Today’s Economy”

How to Make Inertia Work For You

October 17, 2012

Bedtime in the Ward household can be a trick or a treat, depending on how the kids feel that night. What always kills me is the look I get when I remind them that they have to brush their teeth before they go to sleep. Do I really have to explain to them night after night why brushing their teeth is so important? I guess so because I do. Either it’s because my children suffer from short-term memory loss, or more likely it’s because they suffer from “behavioral inertia.” Continue reading “How to Make Inertia Work For You”

What to Do with $100

October 15, 2012

People often ask me what to do with $10,000 or $100,000 because they have saved those assets in their 401(k) and want to make sure they are invested appropriately for their retirement. I can’t recall anyone ever asking me what to do with $100, but that question may actually be the key to financial security and building wealth. Continue reading “What to Do with $100”

A Sad Farewell

September 11, 2012

In 1980, the concept of the 401(k) as we know it was born at the Johnson Cos., a benefits consulting firm located not too far from my home in Pennsylvania. Sadly, the founder of the firm, Edwin T. Johnson, passed away last month at home after a long battle with cancer. Mr. Johnson had been helping his clients with pensions, retirement plans, and health insurance since he started his company back in 1963. Continue reading “A Sad Farewell”

6 Tips for Making the Best 401(k) Investment Choices

July 18, 2012

Investing for retirement can be an intimidating undertaking. Setting aside money in your 401(k) plan is difficult enough, but determining how to invest it presents its own set of challenges. The good news is that you don’t need to be a seasoned, savvy investor in order to make the right choices. In fact, once you determine your risk tolerance and know what to look for in a fund, picking the right one is largely a process of elimination. Continue reading “6 Tips for Making the Best 401(k) Investment Choices”

Top 4 Ways to Begin Investing for Retirement Today

July 04, 2012

If you haven’t been saving for retirement, putting even a little away on a monthly basis can have a huge impact on your future quality of life – especially if you invest in a tax-advantaged retirement account like your employer’s 401k plan or an IRA. This is because of compound interest: If you don’t have to pay taxes on the interest your account earns, that interest stays invested and earns yet even more interest – and the longer you’re invested, the more money you can make. For example, a mere $50 invested every month for 30 years will turn into almost $75,000 if it earns 8% annually – even though your total investment was only $18,000. Continue reading “Top 4 Ways to Begin Investing for Retirement Today”

A Tale of Two Choices

May 25, 2012

Over the last few weeks, I have met a couple of young men who are in the early stages of their career. Both are in their mid-20’s and both make approximately the same amount of money, yet each had very different financial issues to discuss. The contrast with these two gentlemen is something that I am absolutely going to point out to my kids and hope that they can take a valuable life lesson from it. Continue reading “A Tale of Two Choices”

Three Investment Mistakes the Trained Eye Can Spot

May 14, 2012

Recently, I had the opportunity to have a series of one-on-one meetings with employees called Ask-a-Planner sessions where the employees could ask me any question on any financial topic they wanted. Fortunately, they didn’t “stump the planner!” Many people used their time as an opportunity to have me review their allocation in their 401(k). While most of them had an asset allocation that was a fit for them, some of the statements had huge rookie mistake red flags that I’d seen before. Continue reading “Three Investment Mistakes the Trained Eye Can Spot”

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

April 30, 2012

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

1 Week to Go – Remind Your Employees of the IRA Deadline

April 10, 2012

The IRS has given us 2 extra days to file this year due to April 15^th falling on a Sunday and the recognition of Emancipation Day on April 16^th. This also provides a few extra days to consider contributing to an IRA. Your employees are probably aware that any changes they make to their 401(k) contributions can’t impact last year’s tax picture but do they know about the ability to make a prior year contribution to an IRA and how an IRA contribution can increase their overall tax refund with a Saver’s Credit? Continue reading “1 Week to Go – Remind Your Employees of the IRA Deadline”

Your Advisor Told You What?

March 28, 2012

I told you last week about a caller who was still unsure about her financial capacity to retire despite having $1.5 million in her nest egg. The purpose of her call was to get a second opinion on how her retirement nest egg should be invested. A financial advisor wanted her to roll the money over to an IRA and invest it in a moderate balanced portfolio so that she would not run out of money but she wasn’t sure if that was the right thing to do. I’m glad she called because we discovered a few interesting facts during our conversation: Continue reading “Your Advisor Told You What?”