Considering how much risk (a lot) is required for a given return (a little), there may be better investment opportunities available. This is especially important for clients in retirement – where risk management is paramount to investment return.
Imagine wandering around your favorite department store. There is a massive sale – with many products being sold below cost! The deals are so good, that you wonder if the merchandise is any good. “Perhaps,” you think to yourself, “they must be knock-offs. “Or,” you think to yourself, “the products are defective.” You continue to pace around the store, watching the items get snatched off the shelf – for what is a screaming deal. After many items are sold at ridiculous bargain prices, the sale ends. The sale tags come off. All the prices go up. Relaxed that prices are back to normal, you decide, “Now is the time to buy!”
Phil writes in to say, “Why isn’t my portfolio of stocks, bonds and alternative investments matching the performance of the Dow Jones Industrial Average?” The answer to Phil’s question simply has to do with which type of . . .
In a previous post, we discussed three distribution options available to pensioners. That is, how will you receive the money offered by your pension? While there are multiple ways a pension fund can pay out benefits, we discussed three of the most common options in our previous article: In a one-time, lump-sum distribution Via monthly payments for the rest of your life (annuitization) Via monthly…
You want to know how much money your investment is generating, right? This knowledge can help you determine if the investment makes sense for you. That is, should you give it the boot, or hold it forever? To figure out the return of any investment, you need to make sure that you’re looking at both ways an investment generates money . . .
In the fiduciary model, the financial advisor is legally obligated to act in the client’s best interest. This legal obligation requires the fee-only financial planner to work for the client – and not for themselves. This begs this questions, “Why are brokers and other sales people allowed to push their products under the guise of providing financial advice?” and “How can this be legal?”
You may already be invested in private equity; large pension plans are very keen on private equity investments. If you have a pension with CalSTRS or CalPERS, or the University of California, you very likely own some private equity investments . . .
Our opinion that fee-only financial planning is terrific is biased. So, you do not have to take our word for it. Financial journalist Jane Bryant Quinn, consumer expert Clark Howard, personal financial guru Suze Orman, and non-profit organization Consumer Reports are all in agreement about the value of electing a fee-only financial planner, saying that . . .
For shorter investment timelines, the safety of your money may be more important than the fact that the money keeps up with inflation. If so, there are a handful of investment options available, including . . .
Question #3: “Are you healthy?” If not, then it becomes much more difficult to qualify for a long-term care insurance policy. Waiting until you are no longer healthy to apply for long-term care could make the process . . .
“You want to be confident that they will still be in business when, and if, you need to file a claim,” says Nancy McCready, CFP® of the Certified Financial Planner Board of Standards, Inc. (CFP Board). You can check up on this via the rating agencies, such as A.M. Best, which dole out grades to insurance companies. The grades measure a company’s ability to pay an insurance claim. A lower letter grade – i.e. “F” – means . . .
A stretch IRA is not a type of IRA account. Rather, a stretch IRA is a distribution strategy for the inheritors of IRA accounts. With a stretch strategy, the IRA account is passed from beneficiary to beneficiary, with the only withdrawals from the account ever being the RMDs. This allows the balance of the IRA account to grow tax-advantaged.
The Social Security Administrations reports:
…over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67.
Those are some pretty rough odds! Given the risk, a disability policy can be a useful tool for protecting one’s income stream. If you decide to insure your future income by electing disability insurance, consider these four facets when selecting your policy.
Private Equity is a type of investment. Private Equity investments are those investments in companies that are not publicly-traded. (Publicly-traded entities are those whose shares of ownership are available on a public exchange. Apple Inc. (ticker: AAPL) is an example of a publicly-traded company, traded on NASDAQ.)
Private Equity investors usually make their money once a company goes public – once the formerly private company launches its initial public offering (IPO). Facebook (ticker: FB) and Twitter (ticker: TWTR) are examples of recent IPOs.
If you’re one of the few lucky Americans that has a pension, you may have a deliberation in front of you: how and when to receive your money. With many pensions, you can choose to either elect: annuitization (to receive monthly payments for life), or a lump-sum distribution (to receive all the money, at once) You can imagine what it looks like to elect a…
In addition to eternal happiness, marriage provides countless financial advantages, including: Possible Tax Reduction The ability to contribute to a spousal Individual Retirement Arrangement (IRA) account Sharing living expenses The topic of this week’s post discusses yet another advantage available to married couples: assuming an IRA. When an IRA account is opened, the account owner names a beneficiary. The beneficiary receives the assets inside the…
Life’s emotional challenges are often intertwined with life’s financial challenges. When it comes to advanced financial planning, these life challenges are scrutinized for their financial impact. Consider three significant life-changing events: • the birth of a child • the death of a parent • the divorce of a spouse When a family member enters or leaves someone’s life, that someone may need to update their…
It is important to understand your cash flow; you want to know where your money is going. For the purposes of financial planning, categorize expenses into boxes A, B, and C. This process serves as a tool to help manage spending and saving patterns.
Different types of investment returns are taxed distinctly. Knowing how investment returns are taxed can help you better manage your investments. For an explanation of short term capital gains, imagine Bob: Bob buys shares of Apple Inc. Bob’s timing is good, as the share price of Apple shoots up in the following 11 months. With a tidy gain in hand, Bob sells the stock –…
Given current market valuations and the pending interest rate movement, many investors are drawn to short-term investments. Fortunately for those looking to invest for the short-term, there are multiple options available for short-term investing: Treasury Bills Short-Term Bond Funds Money Market funds Savings Accounts Short-Term Certificates of Deposits (CD) Before choosing one or more of the above, consider the pros and cons of short-term investments….
According to a survey by the Society of Actuaries, one of retiree’s biggest fears are investment losses. According to their study, 56% of retiree’s are “apprehensive that their investments will lose value in retirement.” This begs the question: is your money safe at the bank? Of course it is, assuming that the bank is solvent. And even if the bank runs into financial trouble, the…
Enjoying retirement requires following just two simple rules. This sounds too easy – one would imagine that a successful retirement is more complicated. It is complicated! This is because while the rules themselves are simple, following these simple rules is not simple. Read on – and you will learn that managing these two rules simultaneously can actually be quite a challenge. You don’t need a…
You have seen the commercials: people carrying their nest eggs, or their money board, indicating the hypothetical dollar amount required for retirement. Seeing these advertisements may have prompted some introspection on your part. You may be thinking: When can I retire? Less hopeful, you may be thinking: Can I retire? So, what happens if you haven’t saved enough for retirement? Are you fated for an…