There’s a lot of financial information out there for people at various stages in life. But what about for those just starting out in adulthood? How can they get off on the right financial foot? Continue reading “Financial Advice for an 18-Year Old”
If you’re like many Americans, you may be worried that an ability of the politicians in Washington to cut a deal could lead us over the so-called “fiscal cliff,” in which the Bush tax cuts would expire for everyone. While you can’t do much about the taxes on your income, you can at least protect your retirement accounts from higher tax rates in the future by converting them into tax-free Roth accounts by the end of the year. (In addition, many employers are allowing employees to convert pre-tax money in their current retirement plans into Roth accounts.) This conversion would allow you to pay taxes on the money at today’s relatively low rates and avoid the higher future rates. But does it make sense for you? Continue reading “Should You Do a Roth Conversion to Protect Yourself From the Fiscal Cliff?”
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”
Ten thousand dollars is a lot of money but certainly not enough to make you independently wealthy. I remember watching the California lottery television show when I lived in Sacramento. The lottery ticket scratcher winners were chosen randomly to be on the show. Then a few lucky people were pulled from the audience and got a chance to spin a wheel so a ping pong ball would determine whether they won a million dollars all the way down to a minimum $10,000. Most people actually won $10,000 but every single one of them had high hopes of winning the million. Continue reading “What to Do With a Windfall of $10,000”
I’ve been doing a lot of workshops and webcasts on investing recently, and with so much market volatility, and the less than spectacular Facebook IPO, participants have been asking me for my personal opinion on how to invest. One thing I tell everyone is that when it comes to investing, I’m no different than many of you. I’ve had my share of winners and losers, and even though I’ve spent 18 years of my career in finance, that does not bestow upon me some secret gift when it comes to investing. What it has done is convinced me that there are sound, fundamental investment principles that we should all learn to stick with, but at the risk of self incrimination, here is the worst investment decision I’ve ever made: Continue reading “The Worst Investment Decision I’ve Ever Made”
Permanent life insurance has a whole host of benefits, especially for taxpayers in a high tax bracket, but does it make sense when you don’t have dependents? We got this question from one of our Facebook fans (yes- you can ask a question and we’ll answer it for you here.) Continue reading “Is Life Insurance a Good Investment?”
Figuring out how to pay for your child’s college education can be overwhelming. The cost for one year of school at a public university is over $17,000 and is nearly $40,000 at a private school – and that doesn’t even include the price of room and board. Counting on scholarships to cover college costs is foolhardy and the availability of student loans (especially a loan with a good rate) is not guaranteed. Continue reading “Pros & Cons of a 529 College Savings Plan for Your Kids”
The resident financial planners at Financial Finesse handle a variety of difficult questions from employees representing many different walks of life and unique backgrounds. One common area of concern these days is retirement. In fact, nearly 31% of all employees indicate that retirement is their number one financial planning priority. A recent helpline caller represented a perfect example of how a seemingly complex retirement planning scenario can be simplified using some quick and easy to use retirement planning tools. Continue reading “Does Calculating Your Retirement Needs Even Matter?”
As a financial planner at Financial Finesse, one of my responsibilities is to make sure our content library is up to date when things change. Now that I’ve had a chance to review all of the changes that will take place in 2012, I thought it would be helpful to list what I consider some of the more relevant ones, and what you should do to take advantage of them. Continue reading “Important Changes to be Aware of in the New Year”
With our current inflation rate running over 3%, the IRS recently released increased contribution levels for employer sponsored retirement plans. In order to plan effectively, employees should be notified of these higher limits so they can begin to prepare their 2012 financial plans. Continue reading “Most Retirement Plans to Get a Jolt with COLA Increases”
As more and more of the onus of saving for retirement falls on employees, more and more employers will look for ways to enhance their retirement savings plans. One of the emerging plan features that many employers are adopting is the addition of a Roth option in their 401(k) plan. If and when an employer adds this option, it seems inevitable that employees will immediately ask “which option should I use?” To help shed some light on this basic question, here are some things to consider: Continue reading “When in Doubt, Balance it Out”
In response to the recent recession, employers are being forced to reduce or eliminate contributions to their employees’ retirement accounts. This, combined with projected reductions in Social Security benefits, is causing some employees to look for ways to save more for retirement. Most can accomplish this by increasing their contributions to their employer-sponsored retirement plan (e.g. 401(k)), but for those without such a plan, or are already contributing the maximum to the plan, they may need to start saving money in an individual retirement account, a.k.a. an IRA. Continue reading “What to Look for When Opening an IRA”
Over the last few blog posts, we’ve discussed ways to save money in order to achieve financial independence. The next logical question is where those savings should go. After maxing the match in your employer’s retirement plan and paying off any high interest rate debt, I would suggest contributing as much as you can to a Roth IRA. That was the first retirement account I opened early in my career, and it’s one of the first accounts I put money in at the beginning of each year. Continue reading “Why I Love the Roth IRA (and You Should Too)”
Ever since the invention of the Roth IRA (and subsequent Roth 401(k)), taxpayers have been plagued with the question: Should I contribute to a traditional or Roth account?
The answer is quite simple. If you hold your crystal ball just right, you can peer into the future and see what your tax rates are going to be in retirement. If your rates are higher, Roth! If your rates are lower, traditional! What’s so hard about that? Continue reading “To Roth, or Not to Roth”
