One of the biggest decisions many of our clients face is what to do with their 401k plan when they leave their employer. There is no clear cut answer as to whether you should roll over your 401k plan to an IRA, another employer’s 401k plan, or simply to leave it where it is, because it involves several different factors, including long term investment costs and the availability of investment options within the plans. Both can impact the long term performance of your retirement plan. However, the most critical factor that can have a big impact, both short and long term, are the tax implications of a rollover. Understanding these implications is essential before making any decision regarding your 401k plan.
Do you know who is on the other end of that email address? It might not be as apparent as you think. Can you be sure someone isn’t watching every move you make on your computer? You can’t see them, but they can see every keystroke. We are all under the constant threat of a cyber-assault. Are you protected?
The number of people that access their financial accounts online has nearly doubled in the last couple of years. So, it isn’t surprising that the number of cyber-thieves and online “fraudsters” has also increased. They’re after your money and they are relentless in pursuing any and all technological means to get it. Because their point of entry is your computer, you are really the last line of defense in preventing an assault that could rob you of your identity and your money. The first step of prevention is to know how they can get to you.
Many investors have heard the term “asset allocation” at one time or another. From the first time we sign up for a 401k plan at the office all the way through the conversations we have with financial planners in retirement we are bombarded with messages about the importance of proper asset allocation. But what is asset allocation, and what does it mean to investors saving for the future?
One of the best illustrated instances of indecision occurs in the story of Alice in Wonderland in which Alice comes to a fork in the road and must choose a path to continue her journey. She seeks the advice of grinning Cheshire cat which appears out of nowhere. “Where are you headed?” the cat asks Alice, to which she replied, “I don’t know.” “Well,” the cat smugly responds, “then it really doesn’t matter.”
With no clear destination or goals, it’s impossible to make decisions with any degree of clarity and any path we choose will be paved with uncertainty. Setting well-defined financial goals based on a clear vision of what you want to achieve and a time horizon for achieving it, is essential if you ever expect to achieve it.
If you are the parents or grandparents of child of any age chances are good that the escalating costs of higher education are on your mind.
Consider the following statistic; a recent study by Bloomberg found that since 1978 college tuition and fees have increased in price 1,225%. Over the same period of time medical care, another fast-ballooning source of costs, increased by just 634%, while inflation clocked in at a paltry 279%.1
What are the implications of this unprecedented increase in higher education costs? With costs rising this fast above inflation it seems apparent that students cannot count on bootstrapping their way through school by working summers to pay the entirety of their annual college bills.
At the same time concerned parents and grandparents of soon-to-be students would be well served to take matters into their own hands by starting to save for college sooner rather than later.