How many retirement accounts do you and your spouse have? Do you both have Roth IRAs and 401k retirement plans at work? You may find out after closer inspection that your separate plans do not mesh well with each other. In fact, you may find yourself poorly diversified with a lot of fund overlap if you are not too careful. You may want to add several checks to your annual investing portfolio rebalancing this year to synchronize your entire family’s retirement plans. Here are some things to consider. Look At Your Family As A Whole One of … [Read more...] about Are Your Family’s Retirement Plans Fighting Each Other?
This question has plagued financial planners for years. Should you pay off debt, or should they start a retirement account first? This assumes that the same amount of money is involved in each transaction. We will use $5,000 for our examples. Below we will take a look at the pros and cons of each option, and give our opinion. Paying Off Debt First Paying off debt is a great way to use a lump sum of money. Being in debt can be burdensome to the individual in debt, and feeling like you are never going to get out can be awful. If you do not have a … [Read more...] about Which Is First: Paying Off Your Debt or Investing for Retirement?
If you are in a financial bind, seeing the money sitting in your 401k retirement account can be tempting. It is a tempting source that you may consider tapping in order to help alleviate some of your financial problems. However, your 401k retirement plan is there to be your safety net in retirement. Your 401k is not designed to be your emergency fund now. It may seem like it is not a big deal because you are essentially borrowing the money from yourself with interest, but it does not really work that way. There are dangers of 401k loans. … [Read more...] about
This is a guest post by Mike Egan who is the author of “Your Stronger Financial Future”. A recent article in the New York Times focuses on seniors who are considering mortgages on new homes when they retire. The article is a good summary of what seniors (or anyone considering a mortgage application) should expect and the specific items to have handy, such as proof of income and a good credit score. What the article doesn’t address is the question of whether a mortgage is a good idea, either for a senior (65 and older) or anyone else. … [Read more...] about How Debt Can Ruin Your Retirement
Recently, one of my coworkers asked my opinion about taking out a 401k loan to help replace a blown engine in his wife’s car. This is a horrible idea. Your retirement plan is not an emergency fund. Car troubles, uninsured medical expenses, house renovations, and other everyday items are not great uses for money that you have invested in your retirement fund. You should not use your 401k as an emergency fund. It was not designed for that, and you potentially ruin the benefits that the retirement plans were designed to give you. Some … [Read more...] about Your 401k Retirement Plan Is Not An Emergency Fund
What if you were told that you could invest in a savings plan at work where each dollar you put into it is taken off the top? Or, the amount of your contribution will lower the amount you pay in yearly income tax? You need to understand the ins and outs of 401k retirement plans! Also, every dollar and cent you fund the account with will grow tax-deferred. Not only that, each of your 401k retirement plan contributions will make it possible for your employer to match those amounts as well. The Basics of a 401k Retirement Plan The 401k … [Read more...] about Understanding the Ins and Outs of 401k Retirement Plans