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{/if}1 Repeat this to yourself
Especially every time you hear an expert tell you what is going to happen in the next year:
“Nobody, but nobody knows what’s going to happen in the next week, month, year or decade. If they did, why didn’t they predict the latest economic debacle.”
After you repeat that to yourself, acknowledge that the Boy Scouts had it right when they said, “Always be prepared”.
2Stick to 2 Key Principles:
- Hold high quality investments
- Diversify broadly
3Know your total asset allocation.
You need to know how all the pieces are working together. Don’t look at your IRA or 401k in a vacuum. You must look at all of your investments together to make sure that your overall plan is working as it should and is not out of whack.
4Make sure your total asset allocation is in line with your ability to take risk.
This will depend on your emotional make up, time until retirement, and how much income your assets will need to provide for your retirement.
5Know your fees.
Too few people know the actual fees that they are paying … and can you blame them? Financial companies, mutual funds, brokerage companies, all do what they can to bury those fees somewhere the average investor will never be able to find them. But this is one place you HAVE to go the extra mile. The “hidden” fees you may be paying could be the difference to retiring one to five years earlier than you expected … or your money lasting one to five years longer in retirement.
6Know how much you are allowed to contribute … and contribute as much of that as you can.
Whether you are using a 401k or an IRA to fund your retirement, make sure you know this years contribution limits (contact me if you need help) and fund it to the maximum you can comfortably afford.
7Don’t chase returns!
This is the biggest mistake investors make. They pull out of an investment, right before it takes off and go into an investment, right before it tanks. Never invest based on last year’s return. It is a recipe for disaster. You need to invest based on your long term goals, in high quality investment, with broad diversification. If you must chase a return, do it with money you are able to lose without affecting your overall retirement plans.
More topics
Why all the hullabaloo about Roth IRAs?
Beware of Advisors Pushing You to Convert to a Roth
Roth IRAs are excellent tools but they are not for everyone.
Many advisors with dollar signs in their eyes are running around telling everyone they need to convert to Roth IRAs … you see for every person that takes there advice, they’ll get a commission of some sort. So proceed with caution.
Seek out advice from an IRA expert
…but especially get advice from somebody willing to tell you NOT to convert if it doesn’t make sense for you – but will still encourage you to utilize a Roth if it does make sense.
So how do you know if converting to a Roth makes sense for you?
Knowing just a few things can make the decision easier:
- How will your current … and future taxes be affected?
- What is your view of future investment returns
- When would you need to start withdrawing this money?
For your personalized, Free Roth conversion report, fill out the information below.
We’ll email you when it is ready. We can then either email your report, mail it or you can schedule a free, no obligation 30 minute meeting for us to walk through the report with you so as to answer any questions you may have.
Watch this PBS TV Presentation that Will Make You an IRA Expert in Between all the laughs!
Fun PBS special that has you learning and laughing about how to make Your IRA work harder for you … you’ll know more about your IRA than your advisor after watching and have a good time doing it!
“Stay Rich Tax” adviser Ed Slott gives retirement-saving tips.
Note: We are beginning the presentation with the third video in the series.
“Stay Rich Tax” adviser Ed Slott gives retirement-saving tips.
“Stay Rich Tax” adviser Ed Slott gives retirement-saving tips.
“Stay Rich Tax” adviser Ed Slott gives retirement-saving tips.
If You Own an Annuity You May Have a Big Problem …
Losing 40% to the IRS being just one of them—Get the Free e-book The Smart Savers Guide To Using Annuities...Instead Of The Other Way Around
Download your copy now!
ABCs of 401ks
A quick guide to understanding Your 401k
Whether you are still actively working or have retired and have not yet converted your 401k to an IRA, you own one of your most valuable retirement planning vehicles available. From the tax-deferred growth and up-front tax deduction to the benefits you received from dollar-cost-averaging into your 401(k) plan, you have grown a critical component in your retirement tool kit.
Some Basics to make sure You are getting the most from your 401k:
Why should you own a 401(k) Plan
Your 401(k) plan enables you to utilize dollar-cost-averaging (a financial tool that consists of regular investments that will allow you to buy more when an investment is cheap and buy less when it is expensive) and take advantage of tax-deferred growth. With many pension plans disappearing the 401k along with Social Security, is becoming essential to a comfortable retirement.
Unfortunately, the only way to invest in a 401(k) Plan is through your company
You can only participate in a 401(k) plan if your employer has one available to you. Unfortunately, you cannot set up a 401(k) plan on your own. (However, if a 401k is not available to you but you are still employed, you may establish an Individual Retirement Account (IRA) privately. If you're self-employed, you'll have other terrific retirement planning options as well.)
The first reason 401(k)’s work hard for you
Every regular 401(k) contribution immediately reduces your taxable income. For example, an individual in the 28% tax bracket who makes a $200 contribution to her 401(k) plan will immediately save $56 in taxes. (28% x $200). Although their 401(k) account grows by the full amount of their $200 401(k) contribution, their paycheck only goes down by $144!
The Next Reason 401(k)’s work hard for you
Since the money in your 401(k) plan grows tax-deferred, you do not pay taxes on the earnings in the account. You won’t have to pay taxes on the growth until you take your money out of the 401(k) plan, which would ideally be during retirement.
How to Invest in your 401(k)oney
Investing your 401(k) money is critical to its long-term growth. The younger you are, the more aggressive you can be, because you have time to ride out the ups and downs of the market. As you near or enter retirement, you should consider becoming more conservative to reflect the reality that you may be needing that money in the not too distant future.
Required Distributions from 401(k) Plans
In most cases, you must begin to take money out of your 401(k) plan starting with the year after you reach 70 1/2. The required minimum distribution amount is determined by the Internal Revenue Service and is based on your life expectancy.
How to save 43% on Your Required Withdrawal at age 70 ½
This one idea could save a 70 year old with a $200,000 IRA – $75,000 or a $100,000 IRA – $35,000!
Remember the Good Ol’ Days?
Remember when movies were about something? When you could actually understand the words to a song? When a dollar was more than just pocket change?
1935
| Best movie | Mutiny on the Bounty |
|---|---|
| Top song | Lullaby of Broadway by Al Dubin |
| Cost of living | |
| Gallon of milk | $0.47 |
| New car | $580.00 |
| New home | $6,296.00 |
| Average income | $1,518.00 |
1953
| Best movie | From Here to Eternity |
|---|---|
| Top song | No Other Love by Perry Como |
| Cost of living | |
| Gallon of milk | $0.94 |
| New car | $1850.00 |
| New home | $17,400.00 |
| Average income | $4,011.00 |
Remember the good ol’ days when your money was yours to do with as you wish? Now, if you are 70 or older, the IRS makes you spend your retirement money whether you wish to or not. This is called IRA Required Minimum Distributions.
That is just not fair! It’s your money. You earned it! You saved it! And now they are going to tell you how to spend it! That’s just not right!
However, if you don’t want to just blindly take out your hard earned money and pay taxes on it, there is a more intelligent technique to preserve the money that you worked so hard for – instead of just turning it over to the IRS.
I would personally like to invite you to visit me so that I can discuss a particular idea you may not have heard about before concerning Required Minimum Distributions.
This one idea could save a 70 year old with a $200,000 IRA – $75,000 or a $100,000 IRA – $35,000! That’s a 35% savings! It’s all done with a simple and easy idea that has been around for over 12 years.
This idea won’t work for everyone, but it does work for over 90% of all people. Are you part of the 90%? I don’t know. Please give me a call if you would like to take advantage of this offer, and visit about an easy way to preserve your IRA from being eaten away by Required Minimum Distributions. Visit my company page which explains why I became a financial advisor who specializes in IRA Distributions.
I look forward to speaking with you soon.