Newsletter Archive

The Benefits of Dollar Cost Averaging

April 3, 2018

Dollar cost averaging involves investing a set amount of money in the same investment on a periodic basis. Since a fixed amount of money is being invested, more shares are purchased when prices are lower and fewer shares are purchased when prices are higher. Of course, whether dollar cost averaging produces a higher return than investing a lump sum immediately depends on whether the investment's price rises, declines, or fluctuates over the investment period.

Working Longer

April 3, 2018

With increasing longevity and fewer retirement income sources to count on, personal savings will become an increasingly important component of retirement income. However, personal savings rates have not increased, which means that many people may have to discard traditional views about retiring at age 65 and continue to work for longer periods.

Reviewing A Company's Annual Report

April 3, 2018

Whether you're researching a stock to purchase or monitoring a stock you own, the company's annual report should be central to your analysis. Annual reports generally contain three key sections - management's message to shareholders, a discussion of the company's operations, and the financial statements. Keep these points in mind when reviewing the annual report. Read the independent auditor's report. In most cases, you'll find an unqualified opinion stating the fina

Retirement Planning Throughout Your Life

April 3, 2018

After working 40 or 50 years, you could find yourself retired for another 20 or 30 years. To support yourself without a job for 20 or 30 years, you should probably be planning for retirement during your entire working life. However, your concerns and strategies for retirement will change as you age. Consider these tips:

Working Toward Your Financial Goals

April 3, 2018

To help pursue your financial goals, you need a plan to help you get there. These five basic tips can help:

The Basics of Earnings

April 3, 2018

From an accounting standpoint, earnings are calculated by subtracting operating costs, taxes, and preferred stock dividends from revenue. Those earnings are typically divided by common stock shares outstanding to come up with earnings per share, or EPS. EPS is a convenient way to compare earnings over a period of years, so upward or downward trends can be identified.

The Basics of Dollar Cost Averaging

April 3, 2018

If you find it difficult to decide when to invest, consider a dollar cost averaging strategy. Dollar cost averaging involves investing a set amount of money in the same investment on a periodic basis. For instance, instead of investing $48,000 in one stock immediately, you might decide to invest $4,000 in that stock at the beginning of each of the next 12 months. Thus, you don't need to think about when to invest. You just follow your strategy and continue to invest on a periodic basis.

Setting Limits

April 3, 2018

Before looking for a home to purchase, decide on an upper limit for the purchase price. There are no definitive guidelines. An often-cited rule of thumb indicates that your mortgage payment, insurance, and property axes should not exceed 28% of your gross income. Yet in recent years, lenders have become more lenient with their criteria for issuing mortgages, so don't count on your lender to set the limit for you.

Setting Goals

April 3, 2018

Properly designed, your financial goals should provide motivation to help you control spending. Keep these tips in mind when developing financial goals:

Review Your Life Insurance

April 3, 2018

Periodically, you should review your life insurance policies to ensure that they still meet your insurance needs for your current situation. Consider the following points during that review:

The Importance of Life Expectancy

April 3, 2018

How long you expect to live is a major factor in determining how much you need to accumulate by retirement age. Since most people don't know how long they'll live, average life expectancy is typically the starting point for this estimate.

Should We Worry About the Deficit?

April 3, 2018

A federal deficit occurs when the government's expenditures for the year exceed its income. The government then pays for those excess expenditures by borrowing money, adding to the national debt. With so much stimulus money being spent to prod the economy out of recession, the federal deficit will reach record levels this year. According to the Congressional Budget Office, the federal deficit will quadruple in 2009, from $459 billion last year to $1.845 trillion this year (Source: The Economist,

Raising Financially Responsible Children

April 3, 2018

It's not unusual to have concerns about the impact money may have on your children's lifestyles. Even beyond basic financial responsibility, you want to make sure that wealth does not remove your children's incentives to work hard, to pursue meaningful careers, or to care about other people. How do you help your children obtain the values you'd like them to have? Consider these tips:

The Problem with Average Returns

April 3, 2018

When setting up an investment program, the assumed rate of return is typically an average return for some historical period. While that is generally viewed as a conservative approach, there are some problems with using an average return:

Teaching Important Financial Lessons

April 3, 2018

Even though it seems like money and financial topics are discussed everywhere, these are not concepts your children will learn automatically. Some of the most valuable lessons you can teach your children involve basic money concepts, such as the value of saving and investing. Some strategies you can use to help teach these concepts include:

Should You Invest or Pay Off Debt?

April 3, 2018

It can be difficult to decide where to allocate your funds when you want to both increase your investment portfolio and reduce your outstanding debt. While there are many factors to consider, the decision typically depends on the potential return of the investment compared to the interest rate paid on the debt.

Selling Your Home at a Loss

April 3, 2018

With the current state of the real estate market, more and more taxpayers may find themselves in a situation where the sale of their home results in a tax loss or their net sales price is less than the amount of their outstanding mortgage.

Reducing Your Debt

April 3, 2018

Debt is not in itself a bad thing; it is actually the grease that keeps the U.S. economy moving. However, debt has taken on a negative connotation during this economic recession - out-of-control consumer spending, people living beyond their means, and individuals borrowing more money than they can afford to pay back have all contributed to the current financial crisis.

The Basics of Growth and Value Investing

April 3, 2018

The two basic investing styles are growth and value. While one style tends to perform better at any given time, the dominant style varies over time. The basic elements of each style include:

Your Financial Game Plan

April 3, 2018

Most financially secure individuals have written goals and priorities as well as a system in place for monitoring those goals. A comprehensive financial plan should consider six main areas:

The Pleasant Burden of Living Longer

April 3, 2018

It's the proverbial good news, bad news story: Americans are living longer. The good news is not only that we're living longer but that we're staying healthier longer, too, so we're able to enjoy those longer years. But the bad news is that unless we've planned well enough to avoid running out of money, we might have trouble financing those extra years.

Saving and Investing for College

April 3, 2018

When it comes to saving and investing for college for your children, there are really three different questions to answer:

Reviewing Your Insurance Policies

April 3, 2018

Periodically, you should review your life insurance policies to ensure that they still meet your insurance needs for your current situation. A divorce, change in income, or death or illness in the family are all factors that significantly impact the amount of life insurance you need. Consider the following points during that review:

Reverberations of the U.S. Debt Downgrade

April 3, 2018

In early August, Standard & Poor's (S&P) downgraded the United States from AAA to AA, followed by subsequent downgrades to various securities backed by the U.S. federal government, including housing bonds collateralized by Ginnie Mae, Fannie Mae, and Freddie Mac.

Retirees And Their Investments

April 3, 2018

While stock market fluctuations are painful for all investors, they are even more so for those nearing or in retirement. If you're looking for ways to help protect your retirement nest egg, consider these tips:

Reevaluate Your Investment Strategy

April 3, 2018

Even the best-designed investment plan may need changes from time to time. The need for change may be obvious if you experience a significant personal change such as marriage or divorce, or a lifestyle change such as retirement. At other times, the signs that your strategy may need change will be less obvious, such as a gradual increase in your net worth or children finishing their college educations. Reevaluate your investment strategy when:

The Costs of That Second Income

April 3, 2018

After having children, it can be difficult to decide whether both spouses should continue to work. You can't just look at the gross income generated from the second job, since a wide variety of expenses typically accompany that second income. Those expenses include:

Save Your Money or Pay Off Debt?

April 3, 2018

Save your money or pay off debt? It probably comes as no surprise to hear that it depends. But one thing is certain: paying off debt is not the same as saving. Here's why:

The Fundamental Investing Principle

April 3, 2018

The whole point of an investment program is to accumulate sufficient funds to meet your financial goals. So what is the most fundamental investment principle - selecting the proper investments, accumulating the correct combination of assets, timing the market to avoid corrections? Actually, the principle may not even sound like an investment principle at all. To help ensure you meet your financial goals, you must save significant sums of money on a consistent basis...

Retirement Derailers

April 3, 2018

In a February 2013 survey of 1,000 employed and retired Americans aged 50-70 with $100,000 or more in investable assets, 90% of respondents said they had experienced a "retirement derailer" - a specific circumstance that seriously impacted their retirement plans or reduced their retirement savings (Source: Ameriprise Financial, February 2013). Approximately 37% of respondents had experienced five or more such circumstances. The top 10 detailers cited by survey respondents were:

Why Inflation Can Be Good

April 3, 2018

Most people don't have a kind word to say about inflation, and those on fixed incomes hate it. Why? Because it makes everything more expensive; and when you're living on an income that never rises, your standard of living suffers. But ask most economists and they'll tell you that within limits, inflation is a good thing and its opposite - deflation - is a very bad thing. How can that be?

Working With a Financial Advisor

April 3, 2018

While most people have similar financial goals, each person will approach those goals in a unique manner. And with so many options now available in the financial arena, you are bound to face myriad options when deciding how to pursue your financial goals. Even if you feel you can design your own financial plan, a financial advisor can provide a second opinion, suggest options you may not have considered, or help in the following areas:

Retaining Financial Information

April 3, 2018

Feel like you're buried under an avalanche of paper? The steady accumulation of paper over the years can make even the most organized system seem uncontrollable. Some general guidelines on which papers to retain and which to toss include:

Things To Consider When Relocating

April 3, 2018

Major life changes often mean changes in your living situation, and retirement is no exception. Whether you are planning on staying put in your home or want to retire to an exotic location, there are some issues you'll need to consider.I

Should You Own Or Rent?

April 3, 2018

Owning a home is still part of the American dream. Certainly, there are significant financial and tax reasons for owning a home. While you typically only make a down payment of 10% or 20% of the home's cost, you retain all price appreciation on the home. In the beginning, that may only be a small portion of each payment, but significant equity can be accumulated over a period of years. Historically, homes have provided a good hedge against inflation.

Seven Ways to Pay Less for College

April 3, 2018

With the cost of college steadily rising, students and their parents are looking for ways to ease the financial burden. Fortunately, there are ways to reduce college expenses for your child.

Risk Management Techniques

April 3, 2018

The goal of risk management is to help protect your wealth from risks such as death, serious illness, income loss, property damage, and theft.

Retirement Plan Checkup

April 3, 2018

Answer these five questions for a quick checkup to see if you are taking basic steps to save for retirement:

Remain On Track

April 3, 2018

Make sure you consider these strategies to keep your financial goals and objectives on track:

Reevaluate Life Insurance at Retirement

April 3, 2018

As retirement age approaches, it's usually a good time to reassess your life insurance policies to see if your needs have changed. With your children on their own and no earned income to replace, you may no longer need a large life insurance policy. Especially if your insurance premiums are high, you may be tempted to cancel the policy, take the cash surrender value, and enjoy retirement. Before doing that, however, make sure there are't other uses for your life insurance policy, such as:

Reducing Life Insurance Premiums

April 3, 2018

Thinking about purchasing a life insurance policy and looking for ways to reduce your premiums? Consider the following tips:

Your Marginal Tax Rate

March 23, 2018

Different portions of your income are taxed at different rates, on a graduated scale. The current income tax rates are 10%, 25%, 25%, 28%, 33%, and 35%. The income subject to each of these rates depends on your tax filing status, with those amounts adjusted annually for inflation. You can calculate your effective tax rate by dividing total income taxes paid by your taxable income.

Lifestyle Affects Your Life Insurance Premiums

March 23, 2018

When purchasing life insurance, the difference in premiums between preferred rates and standard rates can be substantial. While most people understand that smoking or serious health problems will increase rates, many other lifestyle issues can increase your life insurance premiums:

Helping Parents With Their Finances

March 23, 2018

Discussing financial matters with your parents can be difficult. You don't want to seem concerned about how much money they may eventually leave you, while they may fear you are interfering in their lives. Yet, without discussing these matters beforehand, you may have trouble finding all their financial records or determining their wishes.

Financial Thoughts XIV

March 23, 2018

Approximately 84% of men and women admit that money is a source of tension in their marriage. Approximately 23% of divorced couples cite money as a factor in their divorce, but women are twice as likely as men to list it as a leading cause of divorce (Source: Journal of Financial Planning, June 2006).

Financial Thoughts XIII

March 23, 2018

A recent study found that people who marry accumulate twice as much personal wealth as someone who remains single or divorced, primarily because two people live cheaper than one. Divorce erodes three-quarters of a person's personal net worth, although women are hit harder than men (Source: Journal of Sociology, January 2006).

Financial Thoughts XII

March 23, 2018

In households with $500,000 or more in investable assets, 6% of their income was donated to charity in 2004 (Source: Journal of Financial Planning, April 2006).

Donating Your Vehicle To Charity

March 23, 2018

In the past, you could donate an automobile, boat, or plane to a charitable organization and take a charitable contribution deduction on your tax return equal to the vehicle's fair market value. However, a General Accounting Office report found that many taxpayers were overstating their vehicles' values, resulting in a $654 million loss of income tax revenue in 2000. Thus, the tax rules were tightened as of January 1, 2005.

Countdown to Retirement

March 23, 2018

When your retirement date is only a couple of years away, you should start taking steps to ensure a smooth transition from working life to retirement.

Back to Basics With Bonds

March 23, 2018

With the future direction of interest rates uncertain, you may wonder whether now is a good time to invest in bonds. If you are reassessing your bond investments, consider the following:

How Will an Aging Population Affect the Economy?

March 23, 2018

For years, we have heard that aging baby boomers will place a tremendous strain on our economy after retiring. However, the problem is not limited to the United States, as the populations of Japan and Western Europe are also aging rapidly. With much of the world's wealth held by people in the United States, Western Europe, and Japan, there will be a tremendous strain on savings worldwide due to the fact that retired people typically save less than younger people.

Your Emergency Reserve Fund

March 23, 2018

How much cash do you need to deal with short-term emergencies, such as a temporary job loss, a major home repair, or a large medical bill? A common rule of thumb is that you need a cash reserve equal to at least three to six months of living expenses.

Who Pays Federal Income Taxes

March 23, 2018

Wondering who shoulders most of the burden for paying federal income taxes? The most recent data available from the Internal Revenue Service (for tax year 2003) indicates the following:

Who Is Affected By The AMT?

March 23, 2018

The alternative minimum tax (AMT) was originally designed to ensure wealthy taxpayers paid at least a minimum amount of tax. However, due to the tax calculation, more and more taxpayers are becoming subject to the AMT. For instance, 3.6 million taxpayers paid the AMT with their 2005 tax returns, with that number projected to increase to 30 million, or 20% of all taxpayers, by 2010.

When Should You Sell?

March 23, 2018

It's always difficult to determine the proper time to sell a stock. What if you sell and the stock price increases dramatically? Or what if you hold onto the stock and its price declines? To help you decide when to sell, consider these signals:

What Is Your Bond Yielding?

March 23, 2018

When reviewing the yield on a particular bond, it is important to keep in mind that a bond typically has three different yields - coupon yield, current yield, and yield to maturity.

What Is More Important

March 23, 2018

With limited resources for saving, which is the more important financial goal - saving for your retirement or saving for your child's college education? While many parents want to pay the entire cost of their children's college educations, the reality is that there are a variety of ways to pay for that education - personal savings, financial aid, and loans.

What Is Monte Carlo Analysis?

March 23, 2018

A Monte Carlo simulation is a complex mathematical process that estimates the probability of reaching specific goals in the future. This method is often used to determine the probability that your investments will last for a certain number of years during retirement.

What Are ADRs?

March 23, 2018

American depositary receipts (ADRs) are the form in which foreign stocks trade on U.S. stock exchanges. An ADR is a negotiable certificate issued by a U.S. bank (the depositary), representing shares of a foreign stock. The original foreign stock certificates are owned by the bank and held in the issuer's country. Each ADR can represent a multiple or fraction of the original foreign stock. This ratio is set by the depositary so the ADR's price falls within a range considered typical for U.S. stoc

Watch Out for Internet Fraud

March 23, 2018

The Internet has made online transactions commonplace. However, you should be aware of two forms of Internet identity theft - phishing and pharming.

IRA Distributions for Charitable Contributions

March 23, 2018

As part of the Pension Protection Act of 2006, taxpayers age 70.5 and older can take tax-free distributions, up to $100,000 in 2006 and 2007, from traditional and Roth individual retirement accounts (IRAs) for charitable purposes. This provision is expected to increase charitable contributions from IRAs. Without this provision, donors typically find that the income tax deduction for the charitable contribution is not enough to offset the tax bill generated by the IRA distribution.

Using Average Returns

March 23, 2018

When setting up an investment program, the assumed rate of return is typically an average annual return for some historical period. While that is generally viewed as a conservative approach, there are some issues with this approach:

Undoing a Roth Conversion

March 23, 2018

When converting a traditional individual retirement account (IRA) to a Roth IRA, transferred amounts must be included in income if taxable when withdrawn (e.g., contributions and earnings in traditional IRAs and earnings in nondeductible IRAs), but are exempt from the 10% federal income tax penalty. Your modified adjusted gross income (MAGI) cannot exceed $100,000 in the conversion year, excluding any converted amounts.

Check All Factors Before Switching Jobs

March 23, 2018

When considering a job change, it's tempting to just look at the difference in salary between the two positions and base your decision on that. But before deciding whether to change jobs, you should consider a host of factors, including:

Spending Your Assets

March 23, 2018

A study conducted by the Federal Reserve Bank of Chicago in 2006 found that the elderly tend to spend a significant portion of their wealth in the few years preceding death. For single-person households, wealth decreased by 30% in the year preceding death and by 50% in the three years preceding death. Assets of similarly aged individuals who lived remained approximately the same

Life Insurance and Estate Planning

March 23, 2018

One of the more common reasons to own life insurance is to help fund estate taxes after your death. If the policy is properly structured, the proceeds will not be included in your taxable estate and your beneficiaries will not have to pay federal income or estate taxes. However, with the eventual repeal of the estate tax in 2010, you may wonder whether you still need life insurance for estate purposes.

Know When You Want To Exit

March 23, 2018

Everyone purchases investments with the expectation that the price will go up, earning profits on that investment. Unfortunately, that doesn't always happen, making it necessary to develop an exit strategy.

Is Economic Inequality Increasing?

March 23, 2018

From 1973 to 2005, real hourly wages for individuals in the 90th percentile of income, typically those with college or advanced degrees, rose by 20% or more. For individuals in the 50th percentile or below, typically those with at most a high school diploma, real wages increased by only 5% to 10% (Source: FRBSF Economic Letter, December 1, 2006).

Investing Tendencies

March 23, 2018

In investing, our natural tendencies sometimes make it difficult for us to follow fundamental principles. Make sure you understand these tendencies so they don't adversely affect your investment performance:

Gifting Carefully

March 23, 2018

With the high divorce rate in this country, you might have concerns about making large gifts to a married child. It's one thing to worry about your child using the money wisely. It's an entirely different worry to think your ex-son- or daughter-in-law might leave the marriage with your money. Some ways to ensure the money stays in the family include:

Get The Basics Right

March 23, 2018

The sheer number of financial decisions required to manage our finances can seem overwhelming. But often we spend an inordinate amount of time on small stuff - getting the bills paid on time, reconciling bank accounts, and calling to have a late charge waived. While those things need to get done, how do we judge whether we're headed on the right course? There are six basic financial decisions that can determine the course of your financial life.

Finding Money To Save

March 23, 2018

Everyone knows that they should be saving at least 10% of their gross income for retirement, but that can seem like an impossible goal after paying all your bills. However, don't just figure that you can't come close to saving 10% of your income without looking at the after-tax cost.

Financial Thoughts XXVI

March 23, 2018

Labor force participation of individuals age 55 and older decreased from 34.6% in 1975 to 29.4% in 1993. Since then, the rate has been steadily increasing, reaching 38% in 2006. In 2006, 44.9% of men and 32.3% of women in this age group were employed (Source: Employee Benefit Research Institute, 2007).

Financial Thoughts XXV

March 23, 2018

The percentage of employers offering health insurance benefits to workers decreased from 68% in 2001 to 61% in 2006. For workers enrolled in preferred provider organizations, between 2004 and 2006, copays of $5 to $15 declined from 53% to 38%, while copays of $20 to $30 increased from 43% to 59% (Source: Government Accountability Office, 2007).

Financial Thoughts XXIV

March 23, 2018

A recent survey found that 22% of the respondents had been forced to retire an average of seven years earlier than they had expected. While layoffs and corporate downsizing were the most often cited reason for retiring early, other reasons included illness, injury, and family obligations. Approximately 55% of those who retired early did so before they were able to receive Social Security benefits.

Financial Thoughts XXIII

March 23, 2018

A recent poll found that 33% of respondents expect to rely primarily on personal savings and investments for retirement income, compared to 28% who expect to rely primarily on Social Security benefits, 16% who expect to rely primarily on defined-benefit plans, and 15% who expect to rely primarily on defined-contribution plans. If given a choice, 79% of the respondents preferred a defined-contribution plan over a defined-benefit plan (Source: The Wall Street Journal, 2007).

Financial Thoughts XXII

March 23, 2018

Only 19% of workers know when they will be eligible for full Social Security benefits, while 49% think they will be eligible earlier than the actual date (Source: Employee Benefit Research Institute, 2006).

Financial Thoughts XXI

March 23, 2018

When asked how they viewed retirement, 64% of respondents to a recent survey indicated that it was an opportunity for a whole new chapter in life, 23% indicated it was a time for rest, 9% indicated it was a continuation of what life was, and 3% indicated it was the beginning of the end (Source: U.S. News & World Report, June 12, 2006).

Financial Thoughts XVIII

March 23, 2018

Financial aid experts indicated that 92% of parents overestimate the amount of scholarship money their child will receive for a college education (Source: PlanSponsor.com, 2006).

Financial Thoughts XX

March 23, 2018

A recent report estimates that a 65-year-old couple will need $215,000 to cover health care expenses in retirement, including costs for Medicare Part B and Part D and supplemental insurance. This amount does not include potential long-term-care expenses. It was estimated that a 65-year-old earning $60,000 in the year he/she retires could spend approximately half of pretax Social Security benefits on health care (Source: PlanSponsor.com, 2007).

Financial Thoughts XVI

March 23, 2018

Approximately 55% of grandparents contribute financially to their grandchildren's college education, with 15% contributing $5,000 or more per year (Source: Journal of Financial Planning, September 2006).

Financial Thoughts VX

March 23, 2018

Approximately 77% of all charitable contributions are made by individuals, with families donating an average of 2.2% of disposable income (Source: Kiplinger's Personal Finance, September 2006).

Financial Thoughts VIX

March 23, 2018

Approximately 77% of all charitable contributions are made by individuals, with families donating an average of 2.2% of disposable income (Source: Kiplinger's Personal Finance, September 2006).

Estate Planning for Combined Families

March 23, 2018

The most common estate plan is to leave everything to your spouse, who then leaves everything to your children after his/her death. However, if this is other than a first marriage, you and your spouse may also have children from prior marriages. Then, you need to make fundamental decisions about how to treat assets each spouse brings to the marriage, how to distribute assets acquired after marriage, and how to provide for children from prior marriages. Some items to consider include:

Dealing with Asset Basis

March 23, 2018

Deciding whether you should give a significant asset to an heir during your life or after your death has typically involved weighing potential estate tax costs against capital gains taxes that would be due when the asset is sold.

What Are Convertible Bonds?

March 23, 2018

Convertible bonds are a hybrid investment, combining features of both stocks and bonds. Like all bonds, convertibles pay a fixed interest rate for the bond's life, with the principal returned at the end of the bond's term. However, convertible bonds can also be exchanged for a specific number of shares of the issuing company's common stock.

Common Investor Mistakes

March 23, 2018

Avoid these common investor mistakes when making decisions about your investment portfolio:

Clarification on IRA Disclaimers

March 23, 2018

An important estate planning option for inherited individual retirement accounts (IRAs) is the ability to disclaim all or a portion of the IRA. If a beneficiary disclaims an IRA within nine months of the decedent's death, the disclaimed IRA is not considered a gift when it is received by the contingent beneficiary. However, the nine-month deadline often comes after the deadline for taking the required minimum distribution (RMD).

Catch-Up Contributions

March 23, 2018

In addition to normal contributions, individuals age 50 and older can make catch-up contributions to individual retirement accounts (IRAs) and 401(k) plans. However, in 2004, only 13% of eligible participants made catch-up contributions to 401(k) plans, while only 6% made catch-up contributions to IRAs (Source: Bankrate, Inc., June 26, 2006).

Bonds and Maturity Dates

March 23, 2018

Bonds can be purchased with maturity dates ranging from several weeks to several decades. Before deciding on a maturity date, review how that date affects investment risk and your ability to pursue your investment goals

Bid, Ask, and Spread

March 23, 2018

To determine the commission you are paying to buy or sell a bond, you need to understand the significance of bid, ask, and spread.

Before Purchasing That Investment

March 23, 2018

Before purchasing an investment for your portfolio, make sure you can answer these questions about that investment:

Basics about Insurance

March 23, 2018

Review all your policies every couple of years. You want to make sure you have adequate coverage in all major areas, while also evaluating whether revisions are needed due to changes in your personal circumstances. For instance, your need for life insurance is likely to change drastically over your life, as your lifestyle and the number of people dependent on your income change.

Age for "Kiddie Tax" Raised Again

March 23, 2018

The Small Business and Work Opportunity Tax Act of 2007, signed into law on May 25, 2007, raised the age limit for application of the "kiddie tax" to all children under age 19 (previously age 18) and to students under age 24, effective for tax years beginning after May 25, 2007. Just last year, the "kiddie tax" age limit was raised from under age 14 to under age 18. There is an exception to these new age limits.

Adult Children at Home

March 23, 2018

Once your child has graduated from college, don't assume your financial responsibilities are finished. Adult children return home to live for a variety of reasons. Use the situation to help reinforce basic financial concepts.

A Tax Refund Isn't a Good Thing

March 23, 2018

Most people are delighted when they find out they're due a large tax refund. What they fail to realize is that the government is giving them back their own money, and they loaned it to the government interest free.

Your Family's Finances

March 23, 2018

In many families, one spouse takes primary responsibility for the family's finances, doing everything from paying bills to making investment decisions to reviewing insurance policies. If that spouse dies first, the other spouse may have difficulty taking over these tasks. Thus, it is important to prepare your spouse to handle the family's finances. Some strategies to consider include:

Utilizing Catch-Up Contributions

March 23, 2018

You should take advantage of all tax-advantaged ways to save for retirement. In addition to normal contributions, individuals age 50 and older can make catch-up contributions to individual retirement accounts (IRAs) and 401(k) plans. In 2008, the maximum contribution to a 401(k) is $15,000 plus an additional $5,000 catch-up contribution for individuals age 50 and older, if permitted by the plan. For IRAs, the maximum contribution in 2008 is $5,000 plus an additional $1,000 for individuals age 50

Using Disclaimer Provisions

March 23, 2018

Adding a disclaimer provision to your estate planning documents can give your beneficiaries the ability to determine how to split assets after your death. A disclaimer details what will happen if one of your beneficiaries disclaims his/her inheritance. That way, your beneficiaries can decide after your death how much should be placed in various trusts.

Splitting Your IRA

March 23, 2018

If you have multiple beneficiaries for your individual retirement account (IRA), you can allocate a portion of the IRA to each beneficiary, or you can split the IRA and create separate accounts for each beneficiary. Another alternative is to instruct your beneficiaries to separate the accounts by December 31 of the year following your death. The advantages of splitting an IRA include:

What Is Happening To Long-Term Interest Rates?

March 23, 2018

Typically, when the Federal Open Market Committee (FOMC) raises the federal funds rate, long-term interest rates react by increasing also. However, between June 2004 and July 2006, the FOMC raised rates 17 times in 1/4 percent increments, from 1% to 5.25%, and long-term rates barely moved.

Job Stability in America

March 23, 2018

The most common measure of job stability is job tenure, or the length of time a person holds a job. Based on U.S. Bureau of Labor Statistics (BLS) data from 1983 to 2006, job tenure was essentially unchanged for men and increased for women. However, when that data was broken down by age groups, job tenure for women between the ages of 35 and 54 rose by about six months, while job tenure for men between the same ages fell substantially.

Health Insurance and Retirement

March 23, 2018

While there are many variables to consider when deciding when to retire, a significant factor is the availability of health insurance. Medicare benefits are not available until age 65, even though you can elect reduced Social Security benefits at age 62. One study found that people who retired after age 65 were more likely than early retirees to not have employer-provided health insurance.

Handling A Major Inheritance

March 23, 2018

While there has been much discussion about baby boomers inheriting substantial wealth, so far that has not happened. A 2006 AARP study found that 20% of baby boomers have received an inheritance with a median value of $64,000. Only 15% of baby boomers expect to receive an inheritance in the future. However, if you do receive a major inheritance, consider these items:

Give Your Kids a Good Financial Start

March 23, 2018

It's a common goal - to live a better life than your parents. While you may be able to say you accomplished that goal, how likely is it that your children will be able to say the same thing? To help them with that pursuit, make sure to teach them these important financial lessons:

Financial Thoughts VII

March 23, 2018

In a recent survey, only 39% of active workers have more than $50,000 saved for retirement. Among retirees, 51% have less than $10,000 saved (Source: 2008 Retirement Confidence Survey).

Financial Thoughts VI

March 23, 2018

At the end of September 2007, nearly 4% of primate mortgages were past due or in foreclosure, the highest rate since 1998 (Source: The New York Times, February 2008).

Financial Thoughts V

March 23, 2018

Almost 70% of Americans who participated in a recent survey had not planned for the long-term-care needs of themselves, their spouse, or another relative (Source: America's Health Insurance Plans, 2007).

Financial Thoughts IV

March 23, 2018

Only 4% of long-term-care costs were paid by private insurance in 2004, while 32% of such costs were paid out of pocket (Source: Congressional Budget Office, 2007).

Financial Thoughts III

March 23, 2018

Of those who retired early in 2006, the majority indicated that they were forced to do so due to health or disability problems (28%), job loss (28%), or a need to provide care for an ill spouse or family (25%) (Source: Employee Benefit Research Institute, 2007).

Financial Thoughts II

March 23, 2018

International sales of U.S.-based companies increased at an annual rate of 16.4% for the first quarter of 2007, compared to 2.7% growth in domestic sales. International profits account for 25% of all profits of U.S. companies, up from 5% in the 1960s (Source: U.S. Commerce Department, 2007).

Financial Thoughts I

March 23, 2018

A recent study of over 100,000 employees at 75 companies found that 9% of workers who participated in an employer-sponsored retirement plan left their jobs compared to 20% of workers who did not participate (Source: Plansponsor.com, 2007).

Evaluating Stock Investments

March 23, 2018

You should thoroughly analyze a stock before purchase. But pick up a company's annual report, and you can quickly become overwhelmed by all the numbers. What figures should you concentrate on when evaluating a stock? At a minimum, look for answers to these questions:

Estate Planning Tips

March 23, 2018

Current tax laws have made estate planning more complicated. The estate tax is scheduled to have a higher credit amount for 2009, be repealed in 2010, and then be reinstated in 2011 based on 2001 tax laws. That assumes there will be no future tax legislation before then. Don’t let these evolving tax laws prevent you from planning your estate. Instead, consider the following tips:

Encourage Your Child to Participate

March 23, 2018

Your child has finally finished college and started his/her first full-time job. What is the most important financial advice you can give? Participate in your 401(k) plan as soon as you are eligible. A recent survey by Hewitt Associates found that less than half of those in their 20s contribute to their 401(k) plan, while 40% of those who do participate don't contribute enough to receive their employer's full matching contribution.

Draw Down Retirement Funds Carefully

March 23, 2018

Your withdrawal amount can be calculated based on your life expectancy, expected long-term rate of return, expected inflation rate, and how much principal you want remaining at the end of your life. Guess wrong on any of those variables, and you risk depleting your assets too quickly. Yet, your life expectancy, rate of return, and inflation rate are difficult to predict over such a long time. To help ensure you don't run out of retirement, consider these strategies:

What's Your Debt-to-Income Ratio?

March 23, 2018

It's common knowledge that lenders use your credit score (a mathematical calculation based on information on your credit report) when making lending decisions. But lenders also like to review your debt-to-income ratio.

Control Spending

March 23, 2018

If you're trying to increase savings, remember that savings are directly tied to spending - the less you spend, the more you have to save. Some tips to help you get your spending under control include:

Being Named a Guardian

March 23, 2018

When asked to serve as the guardian of someone's minor children in the event of his/her death, it is usually meant as a compliment. However, don't accept this role without giving it serious thought. Consider the following:

Asset Transfer by Nonspouse Beneficiaries

March 23, 2018

The Pension Protection Act of 2006 contained a provision allowing nonspouse beneficiaries to roll over funds from an employer pension plan to an inherited individual retirement account (IRA) starting in 2007. This was viewed as a significant development for nonspouse beneficiaries, who would be able to extend distributions from employer pension plans over their life expectancies rather than the typical five-year period imposed by most plans.

Assessing Stock Returns

March 23, 2018

Your expected rate of return is a critical element in determining how much to periodically invest to help reach a future goal. Since no one can predict future returns, the expected rate of return is typically estimated based on an analysis of past returns for various investments. So what return can you expect in the future for stock investments?

Answer These Questions Honestly

March 23, 2018

Trying to determine whether all your finances are in shape? Answer these questions honestly to determine places where you may need to shore up your finances:

An Annual 401(k) Review

March 23, 2018

Reviewing your 401(k) plan on an annual basis helps you make sure your plan is on the proper course. Here are three steps to use when reviewing your 401(k) plan:

A Portfolio Tune-Up

March 23, 2018

Over time, the weighting of the asset classes in your portfolio can change. After spending a great deal of time to develop an asset allocation strategy, it can be frustrating to see these changes. However, a simple rebalancing of your portfolio may be all that is needed to get it back in line.

Who’s Paying Income Taxes?

March 23, 2018

Wondering who shoulders most of the burden for paying federal income taxes? The most recent data available from the Internal Revenue Service (for tax year 2006) indicates the following:

What Is a Short Sale?

March 23, 2018

Many homeowners are faced with the fact that their home's market value is less than their outstanding debt. Rather than going through a foreclosure or turning the home over to the lender, some homeowners are attempting a short sale, which is ohm sale for less than the outstanding mortgage. According to the National Association of Realtors, short sales account for approximately 18% of home sales now.

How Is the Fed Dealing with the Recession?

March 23, 2018

As detailed in the 1978 amendment to the Federal Reserve Act, the Fed's goals when setting monetary policy are "to promote maximum sustainable output and employment and to promote stable prices." Monetary policy has historically been implemented through three main methods:

Gifting Considerations

March 23, 2018

Deciding whether you should gift a significant asset to an heir during your life or after your death has typically involved weighing potential estate tax costs against capital gains taxes that would be due when the asset is sold.

Financial Thoughts IX

March 23, 2018

A large majority (61%) of families with incomes of $150,000 or more agree that they aren't saving enough money for the future, while more than three-fourths of those earning lesser amounts feel the same way (Source: Pew Research Center's Social and Demographic Trends Project, May 2008). More than 6.1 million Americans are covered by Health Savings Account (HSA) insurance plans, a 35% increase since last year (Source: America's Health Insurance Plans, April 2008).

Financial Thoughts VIII

March 23, 2018

Approximately 31% of people do not understand that their credit score affects their cost and ability to get credit (Source: Consumer Federation of America, 2008). More than 7.5 million American homeowners with a mortgage are spending half of their income or more on housing costs (Source: U.S. Census Bureau, 2008).

Buying a Home in a Weak Market

March 23, 2018

The purchase of a home is a major financial commitment. While it is a decision that should always be made with care, the weak real estate market means you should exercise even more caution. Don't let the excitement of looking for your dream home prevent you from following these tips:

Be Prepared for a Layoff

March 23, 2018

In these economic times, job security is a notion from the past. All workers should be prepared financially for the possibility of a job layoff. Here are some tips to help with that process:

Banking on Family and Friends

March 23, 2018

The next time you're inclined to agree to a loan to family and friends, follow these tips to make the transaction as business-like as possible:

Asset Allocation Basics

March 23, 2018

The theory behind diversification, or asset allocation, is to spread your investments across different asset classes to help protect your portfolio from downturns in any one asset. Diversification is a defensive strategy - it is meant to protect your portfolio during market downturns and to reduce your portfolio's volatility.

Your Stock Allocation

March 23, 2018

Some factors to consider when deciding how much to allocate to stocks include:

Using Portfolio Losses

March 23, 2018

Capital gains on investments held for one year or less are short-term capital gains taxed at ordinary income tax rates. For investments held over one year, the maximum long-term capital gains tax rate in 2010 is 15% (0% for taxpayers in the 10% or 15% tax bracket). While the 15% rate is significantly below the maximum ordinary income tax rate of 35%, it still takes a significant chunk out of your investment portfolio.

Time to Reassess Your Risk Tolerance

March 23, 2018

Typically, before deciding how much to allocate to different investment categories, you answer several questions about your tolerance for risk. While it can be difficult to judge how you will react to different scenarios, the recent stock market fluctuations have provided a real-world test of theoretical answers. Thus, you should now have a better understanding of your comfort level with risk, making this a good time to reassess your risk tolerance

Get Your 401(k) Plan on Track

March 23, 2018

To make sure you have sufficient funds for retirement, you need to get your 401(k) plan on track. To do so, consider these tips:

Evaluating P/E Ratios

March 23, 2018

Price/earnings (P/E) ratios are a common measure of stock value, both for individual stocks and the overall market. Calculating a P/E ratio is straightforward - it is simply the price of a single share of stock divided by the company's per-share earnings. However, P/E ratios can be calculated using different earnings numbers. Trailing P/E ratios, which are typically reported in newspapers, use earnings per share for the most recent four quarters, while forward P/E ratios use forecasts of future

Estate Planning for Blended Families

March 23, 2018

While estate planning can be complex for all families, it can be especially complex for those in other than a first marriage. Ensuring that everyone is treated fairly can be a challenge, but these tips can help:

Estate Planning and Your Retirement Accounts

March 23, 2018

For many people, retirement accounts, including 401(k) plans and individual retirement accounts (IRAs) are their most significant assets. While you may think you'll need every bit of money in those accounts for retirement, what would happen if you die at an early age? You should include these accounts in your estate plan so heirs inherit them with minimal estate and income-tax effects. Some strategies to consider include:

Credit Issues as You Age

March 23, 2018

While obtaining credit can be just as important for older individuals as it is for younger ones, older individuals often have unique credit issues. For instance, waiting until after retirement to apply for a loan can result in the loan being rejected because your income is much lower. Or, if one spouse dies, the surviving spouse may find that lenders want to close accounts, or the spouse may not have a sufficient credit history to apply for credit on his/her own.

Clamp Down On Spending

March 23, 2018

If you're trying to increase savings, remember that savings are directly tied to spending - the less you spend, the more you have to save. Some tips to help you clamp down on your spending include:

Caught in the Middle

March 23, 2018

At a time when baby boomer couples should be saving for their own retirements, many feel squeezed by competing financial needs. Having started families later than past generations, their children may just now be entering college or still living at home. At the same time, aging parents may need financial assistance. It is a dilemma that is likely to become more common.

Calculating Your Financial Ratios

March 23, 2018

When reviewing the financial health of a company, it's common to look at financial ratios, such as earnings per share, price/earnings ratios, book value, and total return. The reason financial ratios are so popular is they give you a means to evaluate financial information, while allowing you to track changes over time.

Bond Strategies for Varying Goals

March 23, 2018

The strategies used for bond investing will depend on the financial objectives you are pursuing. Consider these financial objectives and bond strategies:

Strategic Defaults a Financial or Ethical Issue?

March 23, 2018

The recent recession has been marked by reduced consumer spending and ballooning debt burdens, rising unemployment and falling home values, and considerable hardships for countless people. The pain is real for those who have lost their jobs (almost 8 million since the recession began) and their homes (1.2 million) (Source: MSNBC, 2010).

Advice on Saving for Your Child

March 23, 2018

Your child has finally finished college and has started his/her first full-time job. What is the most important financial advice you can give? Participate in your 401(k) plan as soon as you are eligible. The quality of your child's retirement will largely be determined by the amount of money he/she saves, and a 401(k) plan is a great place for him/her to start. Before marriage, a new home, or other obligations consume his/her entire paycheck, get him/her into the habit of saving.

Your Retirement Is Your Responsibility

March 23, 2018

Do you know how you will pay for your retirement? Company-sponsored defined-benefit plans are on the decrease; and Social Security, at a minimum, is likely to become less generous. To make sure you will enjoy a comfortable retirement, you must take responsibility for saving for that retirement. Your chances of saving enough improve dramatically if you:

Your Plans for Retirement

March 23, 2018

How much will you need to live a comfortable retirement? It's a question that can't be answered without giving serious thought to how you really want to spend your retirement. Retirement is no longer viewed as a time to slow down, but is now considered a new beginning in life. Thus, your current living expenses may have little to do with your retirement expenses. However, keep in mind that retirement often proceeds in stages, with different spending trends in each stage.

Your Parents And Their Finances

March 23, 2018

Discussing finances with your aging parents can be upsetting. You may have difficulty broaching the subject because you don't want to seem concerned about how much money your parents have. On the other hand, your parents may fear you are trying to interfere with their lives. Yet, if you wait until you must take control of their finances and they are unable to assist you, you may have a tough time finding all of their financial records or determining what their specific desires are.

Your Financial Road Map

March 23, 2018

A financial plan is similar to a road map. Together, we figure out where you currently are and where you want to be financially. While there are many routes to help you arrive at the desired location, we figure which is the best way to help you arrive in the most efficient manner possible and with the least amount of risk. This is not a one-time-only financial planning session. I will help you periodically review your progress so we can correct your course as you go, so you don't get lost.

Why and How to Diversify Your Stock Portfolio

March 23, 2018

Ask 100 individual investors what they think is the number-one secret to making money in the market, and the answer you're likely to hear most often is: "Choosing the right stocks." But that would be wrong. Because the number one secret to making money on Wall Street is:

Which Goal Is More Important?

March 23, 2018

With limited resources, which is the more important financial goal - saving for your retirement or saving for your child's college education? While many parents want to pay the entire cost of their child's college education, the reality is that there are a variety of ways to pay for that education - personal savings, financial aid, and loans. Unfortunately, there aren't similar options for your retirement. No one is likely to loan you money if you haven't saved enough for retirement.

Where Should You Hold Investments?

March 23, 2018

How earnings are taxed on investments depends on whether the investments are held in a taxable or tax-deferred retirement account.

What's College Going To Cost?

March 23, 2018

According to the U.S. Census Bureau, in 1973, just 47% of those who earned a high school diploma went on to college. By 2007, the number had risen to 67%. And it's no wonder: over their lifetimes, people with bachelor's degrees earn nearly $1 million more than those with only a high school education, and their unemployment rates typically run three percentage points lower (Source: The College Board, 2010).

What Is Causing the Jobless Recovery?

March 23, 2018

Although the recession officially ended in June 2009, unemployment rates are decreasing slowly, the average length of unemployment remains at a historical high, and the unemployment rate is projected to remain above 7.8% until 2013. The concern is that we are again facing a jobless recovery, with economic activity growing, while the unemployment rate remains high.

Volatility Can Be A Drag On Your Portfolio

March 23, 2018

The week of August 8, 2011, was one for the record books. Never before had the Dow Jones Industrial Average gone through four consecutive days when it closed more than 400 points up or down. In fact, in the course of those four days, the market zigzagged a total of more than 2,000 points, or nearly 19% of its value at the close on Friday, August 5.

Two Schools of Thought: Fundamental and Technical

March 23, 2018

There are two schools of thought on how best to analyze the stock market. On one hand are the fundamentalists and on the other are the technicians. It's typically advisable for investors to make their own separate peace with each. The result can be two sets of indicators that complement each other - and a strategy that helps with investment decisions.

It's Time To Revisit Your Estate Plan

March 23, 2018

Estate plans should be reviewed periodically to ensure that their objectives are still being met. And now, with major changes in the tax code that affect estates, it's important you revisit your estate plan as soon as you can. In general, here are guidelines as to why and when you should take another probing look into how you can best pass your assets to your beneficiaries and charities of your choice.

Stop Procrastinating Now

March 23, 2018

For most, procrastination is probably the leading reason why they do not achieve their financial goals. Tomorrow always seems like a better time to begin that investment program. If procrastinating only lasted a year or two, it wouldn't be so devastating. But for many, procrastination can last a lifetime.

Steps For Pursuing Your Financial Goals

March 23, 2018

Obtain an accurate picture of your finances by organizing all tax records, wills, trusts, insurance policies, mortgage documents, and other important records to determine the full scope of assets and liabilities. Establish short- and long-term goals, such as reducing debt, increasing contributions to a retirement fund, increasing investments or savings, reevaluating insurance coverage, or planning for your children's or grandchildren's college educations...

Someone Always Pays For Life Insurance

March 23, 2018

It isn't the cost of life insurance that gives us a problem. Truly understood and properly measured, the cost is negligible at the outset. In the long run, it begins to pay a profit instead of assessing a cost. It is the cost of food, clothing, shelter, college educations, a mother's full-time devotion to her children, living without working in retirement, and the assets passed on to heirs that must be sold to pay taxes...

Six Steps To An Effective E-Mail Signature

March 23, 2018

Despite the growing popularity of Facebook, Twitter, and other communication channels, e-mail remains popular in the business world. Here are a few tips to help you make your e-mail messages stand out with an effective signature line.

Should You Still Invest In Stocks?

March 23, 2018

The first decade of the 21st century has been painful for investors accustomed to hearing that stocks are the best place for long-term growth and the only asset class that protects wealth against inflation.

Clean Up Your Portfolio

March 23, 2018

As a new year starts, get all your information together, thoroughly analyze it, and clean up your portfolio. Some points to consider during this review include:

Life Insurance: A Key Component of Estate Plans

March 23, 2018

Because of its flexibility, tax advantages, and potential to leverage your assets, life insurance can be an important estate planning tool. The usefulness of life insurance in almost any estate plan of any magnitude makes it one of the most universally applied tools. There are three major reasons:

Keeping Score of Your Financial Progress

March 23, 2018

Keeping score is important in finances. You only know if you're making progress toward your goals if you've created a plan that tells you where you need to be and when. Essentially, there are two numbers to focus on: your total net worth and your liquid net worth. The distinction comes chiefly from the fact that most of the average American's net worth rests in their home, and everybody needs a place to live. If you own it, under normal circumstances, you can't readily sell it to raise money...

Keep Debt Under Control

March 23, 2018

While we once assumed debt with reluctance and were anxious to quickly pay it off, debt has become an accepted part of our lives. However, just how much debt can you safely handle without endangering your financial security?

How Much Life Insurance Should You Have?

March 23, 2018

While health insurance has dominated the headlines for the past several years, there's an ongoing problem that is largely unnoticed by the press: millions of Americans don't have enough life insurance.

Guidelines and Strategies for Charitable Giving

March 23, 2018

We all get a feeling of satisfaction when we help a good cause, and lightening your tax burden at the same time just makes the benefits even greater. Thus, it's important to understand the tax-related ins and outs of your charitable giving before you make the gift.

Global Concerns Impact The Stock Market

March 23, 2018

For investors, as if low home values, high unemployment, and mounting debt weren't enough, in the last several months both the United States and the world have witnessed significant economic, political, financial, and even weather-related events.

Estate Tax Exclusion

March 23, 2018

The new federal tax law ushered in the highest estate- and lifetime gift-tax in U.S. tax law history: $5 million for individuals and $10 million for married couples. While this may appear to have taken off the pressure for careful estate planning - only 1% of U.S. estates are estimated to be larger than $5 million - the higher limits pose both opportunities and challenges for high-net-worth families.

Estate Planning: Death And Taxes

March 23, 2018

We have all heard the saying that there are two things that are unavoidable: death and taxes. No one likes to consider their own death or that of their spouse. However, since we know these are inevitable, it makes sense to start planning for the unthinkable. Consider having these files available so you can help ensure your loved ones will have as few problems to deal with as possible:

Economic Indicators

March 23, 2018

Sooner or later, every investor is curious to know if economic indicators can provide clues for investing. That's why financial institutions have economists on staff and why the latest government reports on this economic indicator or that make headline news.

Coping with the College Debt Crisis

March 23, 2018

America reached an ominous milestone last year. For the first time in history, U.S. student college debt exceeded credit card debt. According to the Project on Student Debt, a nonprofit research center, college and graduate students are adding education debt at the rate of $2,853.88 per second, which means they will reach the $1 trillion mark sometime next year.

Coping With Market Volatility

March 23, 2018

Keep repeating to yourself, "I'm investing for the long term. Short-term fluctuations are an expected part of investing." Still having a difficult time remaining calm during this volatile period? Volatile markets are frustrating for all investors. Should you stay the course of an "all-weather" strategy, or should you depart from it to minimize your losses? Or, should you be more aggressive and try to profit from any downswings? These are challenging questions that are difficult to answer...

Concentrate on the Basics

March 23, 2018

When faced with all the decisions that need to be made to ensure you select appropriate investments to help pursue your long-term investment goals, it's easy to become overwhelmed. How do you choose the right combination of investments to help you work toward a goal that may be decades away? The answer is to concentrate on the basics. Make sure you are getting these fundamentals right:

College: The Advantage of Going Public

March 23, 2018

A growing number of parents and students are reconsidering the value of public institutions of higher education. For in-state residents, getting a bachelor's degree from a state-funded institution can be one of life's greatest bargains. The total annual cost - including room and board, books, travel, and all personal expenses - averages $19,000. That's less than half the cost of the average private college education and well below the price tag for the so-called elites.

Can You Answer These Questions?

March 23, 2018

During the development of an investment strategy, you should answer several questions about your preferences.

Businesses Encouraged To Spend

March 23, 2018

The 2010 Tax Act extends numerous business tax provisions that had expired at the end of 2009, extending them for two years until December 31, 2011. However, the bigger news for businesses is the expansion of tax incentives for purchasing property:

An Investment Review

March 23, 2018

The most often-asked question we hear is, "What's next for the market?" As always, the future is unwritten, but we do know we should continue to follow the basic rules of investing:

Allocating Investments

March 23, 2018

One of the most important decisions you as an investor can make involves allocation among different investment categories, such as cash, stocks, and bonds. The stock market can go down as well as up, and you should expect price fluctuations and market dips. Investing in a broadly diversified portfolio may help your portfolio ride out market volatility.

A Tax-Planning Mentality

March 23, 2018

Take time early in the year, perhaps as part of the tax preparation process, to assess your tax situation, looking for ways to reduce your tax bill. Consider a host of items, such as the types of debt you owe, how you're saving for retirement and college, which investments you own, and what tax-deductible expenses you incur.

Your Retirement Planning Assumptions

March 23, 2018

To enjoy your retirement without financial worries, make sure you have enough money saved when you retire. However, that calculation can be a daunting task, since a variety of factors affect your answer, and inaccurate estimates for any factor can leave you with way too little in savings. Some of the more significant factors include:

What Happened To The Savings Crisis?

March 23, 2018

In June 2005, the U.S. passed an ominous milestone when the personal savings rate - the average percentage of total household income that isn't being spent - went below zero. It wasn't long after that headlines about America's "savings crisis" appeared, with reports about how poorly prepared for retirement millions of Americans were and how our lack of thrift was jeopardizing our position as the richest and most powerful nation in the world.

Keep Saving After Retirement

March 23, 2018

Just because you're retired doesn't mean you should stop saving. Consider these tips:

Challenges To Your Retirement

March 23, 2018

We all know saving for retirement is becoming more and more challenging. Longer life expectancies, fewer traditional pensions, and decimated investment portfolios are the most obvious challenges. But there are other, less obvious threats to your retirement:

When Can You Retire?

March 23, 2018

When can you retire? It depends - on how old you are; how much you have saved; the extent to which you'll rely on Social Security, a pension, or tax-advantaged retirement accounts; how your investments perform; the kind of lifestyle you want in retirement; and how long you'll live

What To Do When You Have Your, My, and Our Children

March 23, 2018

It's not news that American families don't look like they did on 1950s sitcoms: a mother and father who married for life and raised their two and a half biological children to adulthood. With our divorce rate at 50%, remarriage by half of those, and a growing number of same-sex parents, the "typical" family includes a mix of biological children of both spouses.

Time To Review Your Estate Plan

March 23, 2018

Estate plans should be reviewed periodically to ensure that their objectives are still being met. And now, with major changes in the tax code that affect estates, it's important that you revisit your estate plan as soon as you can. In general, here are guidelines as to why and when you should take another probing look into how you can best pass your assets to your beneficiaries and charities of your choice.

Help Beneficiaries Avoid IRA Mistakes

March 23, 2018

While annual contributions to IRAs are still relatively modest, the ability to roll over 401(k) balances to an IRA can result in significant IRA balances. In addition to retirement planning vehicles, IRAs are thus becoming estate-planning tools. If you are in that situation, help your beneficiaries avoid these common IRA mistakes:

Contributing to Spousal IRAs

March 23, 2018

A spousal individual retirement account (IRA) allows a nonworking spouse to contribute to an IRA, even the spouse has little to no earned income. Here are the basics:

Changes in Estate Taxes and Planning

March 23, 2018

On January 2 of this year, President Obama signed into law the American Taxpayer Relief Act (TRA 2013). In addition to preserving the Bush Administration income tax rates for most people (while raising the highest rate), it also made a handful of significant changes to the federal estate and gift tax provisions. Here's a summary of those changes.

Are Trusts Still Valid Estate-Planning Tools?

March 23, 2018

Trusts are often viewed estate-planning tools used to reduce estate taxes. With the large estate tax exclusion amount ($5.25 million in 2013), does that mean that trusts are no longer needed for estate planning purposes? The answer is probably not. Trusts are established for many purposes, not just to reduce estate taxes. Some of the more commonly used trusts include:

Are Stock Splits Always A Good Thing?

March 23, 2018

There are few announcements that get stock investors as excited as an upcoming stock split. They're often taken as a portent of good things for years to come for the investors who hold shares the day before: solid sales and revenue growth for the company, an upward trajectory for the stock price, and the prospect of even more splits in the future.

A Three-Step Asset Allocation Plan

March 23, 2018

Perhaps the most important move you can make for your investments is to properly diversify your portfolio. By investing in a mix of stocks, bonds, and cash, you'll reduce the risk of a significant loss.

Tips For Your Estate Plan

March 23, 2018

The estate tax exclusion amount is $5,340,000 in 2014. While that amount is so large that most estates won’t be subject to estate taxes, that does not mean you should not make estate plans. Instead, consider the following tips:

What's The Real Unemployment Rate?

March 23, 2018

To understand the unemployment rate, it's important to understand a few terms. First, labor force is the number of people (typically just those over the age of 16 and not in the military) who either have jobs or are looking for jobs. People considered not in the labor force are retirees, students, stay-at-home parents, and others who are not employed and not looking for work.

Life Insurance For Risk Management

March 23, 2018

When it comes to planning for your future and managing income and investment risk to provide for your family, it's safe to say you have a lot of competing priorities. That's why many of today's complex life insurance options are designed to address multiple needs in one contract.

How Financial Planning and Retirement Planning are Different

March 23, 2018

According to the most recent (2012) Household Financial Planning Survey conducted by the Certified Financial Planner Board of Standards, only 31% of financial decision makers have a comprehensive financial plan. If the survey had asked respondents to define "comprehensive financial plan," few probably could have; most people define "financial plan" synonymously with "retirement plan."...

Giving Your Kids a Head Start

March 23, 2018

When it comes to their kids' financial independence, many parents don't give it much thought. Here are six steps to get you started.

Flexibility In A Financial Plan

March 23, 2018

When it comes to flexibility in a financial plan, it's a delicate balancing act. It is important to maintain enough flexibility that your financial plan can accommodate unexpected events that are out of your control. On the other hand, a sound financial plan needs to be firmly grounded by factors you can control so that even in the face of unexpected events, following your financial plan gets you to where you want to be.

Five Life Insurance Myths Debunked

March 23, 2018

Life insurance is one of the most common types of insurance that people buy. In 2013, 62% of Americans had at least some life insurance coverage (Source: Insurance Information Institute, 2013). Yet life insurance is also one of the most misunderstood types of insurance. All too often, people don't understand some of the basic facts about life insurance - who needs it, how much coverage to buy, and what purpose it serves. Below, we debunk five of the most common myths about life insurance coverag

Your Biggest Retirement Planning Questions Answered

March 23, 2018

Planning for retirement often seems to involve more questions than answers. Below, we answer some of the most common questions, so you can make more informed decisions when planning for the future.

Watching Your Stocks

March 23, 2018

No matter how often you prefer to monitor your stocks' performance, there are certain items you should consider. Here are five things to review as you monitor your stocks' performance:

Using Price/Earnings Ratios

March 23, 2018

Unfortunately, there is no way to tell with certainty whether a given stock is a good buy (or whether it's time to sell), but a stock's price/earnings ratio can provide an indication of the value of that stock. The price/earnings ratio - or P/E ratio - is the most widely used yardstick for evaluating stocks. A stock's P/E ratio is its current price per share divided by its annual earnings per share.

Use Conservative Estimates

March 23, 2018

How can you ensure you'll have sufficient funds to last your entire retirement? So many of the variables used to calculate this amount seem uncertain. If you're concerned about running out of money during retirement, you need to be very conservative with your assumptions.

Student Loans and Home Ownership

March 23, 2018

We've all heard the stories about the crushing levels of student loan debt among recent - and not so recent - college grads. Americans now owe more $1 trillion in education-related debt, with an average loan balance of roughly $30,000 (Source:U.S. News & World Report,November 13, 2014).

Staggered Retirements

March 23, 2018

Often, spouses don't retire at the same time. Frequently, one spouse may retire first due to health problems or a layoff, not necessarily because the spouse chooses to retire early. No matter what the reason, keep these points in mind if you are in that situation:

Life Insurance as an Estate-Planning Tool

March 23, 2018

Life insurance and estate planning are intimately connected. By purchasing life insurance today, you are making a decision about how you want your heirs to be provided for after your death. Here's what you need to know about life insurance and estate planning.

Leaving a Legacy

March 23, 2018

Many of us want to do our parent to leave the world a better place. Fortunately, there are many ways you can ensure that you'll have a meaningful impact on the world and leave a legacy that lasts long after you're gone, including the work you do or how you raise your family. Of course, you can also leave a financial legacy, using the wealth you've accumulated in your lifetime to benefit the world. Below are six different ways you can leave a financial legacy.

Know Your Investment Personality

March 23, 2018

Knowing your investment personality, if you're conservative, aggressive, or somewhere in between, has a direct bearing on which investment types you should select to help you meet your financial goals. Your investment personality can also change over time.

Investment Strategies For Conservative Investors

March 23, 2018

Is there such a thing as a safe stock market investment? The answer is not a simple yes or no. There is no way to ensure that an investment will be a safe one, because no company - and thus no stock - is impervious to market volatility, economic fundamentals, or the whims of investors. That said, there are strategies that can help mitigate the risk inherent in stock investing.

Harness The Power of Compounding

March 23, 2018

In the world of investing, among a seemingly endless variety of complicated systems, stands one simple but powerful concept. It's one that when mastered and correctly applied can contribute more to creating wealth for the average investor than perhaps any other: the power of compounding. The secret to the power of compounding is instead of growing arithmetically it grows exponentially, as long as you do one very important thing: instead of spending the returns on your money, reinvest all...

Handling the Financial Aspects of a Death

March 23, 2018

The emotional trauma of dealing with a loved one's death can be devastating. If you must also handle the financial aspects, it can seem overwhelming to deal with all the details. Following is a checklist of items to consider:

Five Facts About Student Loans

March 23, 2018

Given the cost of college these days, few people can afford to pay all the tuition and related expenses out of pocket. Many turn to student loans to make up the difference. There are some things you need to know before you take out the loan. Below are some less-known, but still important, facts about student loans. (Note: Most of these facts apply to federal, not private, student loans.)

A Complex Process: Financial Planning

March 23, 2018

The financial planning process starts by determining where you are now. This includes calculating your net worth, your cash flow, and your short- and long-term goals. Strategies to help you reach those goals are then developed. A comprehensive financial plan will review:...

Coming To Terms With Stocks

March 23, 2018

It can be difficult to determine how to devise an investment strategy to help reach your financial goals. To help determine a reasonable rate of return to expect on your stock investments, it might be instructive to review some facts about the stock market: The stock market's historical return can change dramatically depending on the period considered.For instance, from 1926 to 2014, the Standard & Poor's 500 (S&P 500) had an average annual return of 10.2%...

Changing Your Investment Strategy

March 23, 2018

An investment strategy is designed to give focus and cohesion to your investment decisions. Yet this strategy will probably not remain constant over the course of your life. Significant changes such as retirement may require major changes to your portfolio. It is important to consider a couple of factors when shifting assets based on these changes. Major shifts in allocations should be made over a period of time. If large amounts of money are involved, it is generally best to gradually shift th

Celebrity Estate-Planning Lessons

March 23, 2018

Celebrities: They're just like us, at least when it comes to estate-planning mistakes. Whether it's because they are too busy, unwilling to consider their own mortality, or led astray by bad advice, celebrities often die with their estates in disarray. While you may not have to clarify in your will who gets your Oscar statuette; you should still take care, since these types of celebrity estate planning mistakes can happen to anyone.

Budgeting Your Way to Financial Health

March 23, 2018

Getting a handle on how much money comes in and goes out of your household is essential to reaching your financial goals. First, you can begin by organizing your financial records to determine how much money is coming in and where it is going. Next, categorize your expenses into three groups: regular payments such as mortgage payments, essentials that can be reduced such as clothing, and nonessentials that can be decreased or even eliminated like entertainment...

Avoid These Investor Mistakes

March 23, 2018

Avoid these common investor mistakes: Chasing performance. Investors often move out of sectors that are not performing well, investing that money in high-performing investments. But the market is cyclical; and often those high performers are poised to underperform, while the sectors just sold are ready to outperform. Rather than trying to guess which sector is going to outperform, broadly diversify your portfolio...

Asset Allocation and Diversification

March 23, 2018

So, it's time to start selecting investments for your retirement account. You sit down at your desk, start looking over the list of investment options, and are quickly overwhelmed. How do you build your retirement portfolio (or any other investment portfolio)? What's right for you? The answer to those questions lies in two essential investing concepts: asset allocation and diversification.

Action Steps to Your Financial Stability

March 23, 2018

Get a fix on your finances by organizing your tax records, wills, trusts, insurance policies, mortgage documents, and other important documents to determine the full extent of your assets and liabilities. Establish short- and long-term goals, such as reducing debt, increasing contributions to a retirement fund, increasing investments or savings, reevaluating insurance coverage, or planning for your children's college educations...

Five Steps To Creating An Investment Plan

March 23, 2018

Like anything in life, having a plan for your investments will help you reach your investment goals. Below are five steps for crafting your investment plan. Determine Your Goal Every good investment plan begins with a clear goal in mind. Ask yourself: "Why am I investing? What do I hope to do with the money I save and earn?" For example, you might invest to: Fund a child's college educationRetire comfortablyBuy a houseStart a new businessLeave a charitable bequest to a favorite

5 Rules For Buying Your First Home

March 23, 2018

Buying your first home is a big step, both emotionally and financially. Once people decide to buy a house, it’s easy to get caught up in all the details. Rushing into a home purchase without paying attention to some basic rules can lead to future trouble. Here are five guidelines to keep in mind when you’re buying your first home.Know How Much You Can AffordBefore you even start looking at listings, sit down and crunch some numbers. You may want that $500,000 dream home; but in reali

A Look at Bond Ladders

March 15, 2018

A bond ladder is a portfolio of bonds of similar amounts that mature in several different years. For instance, a $100,000 portfolio might consist of 10 different bonds of $10,000 each, maturing in 10 consecutive years. When a bond matures, the principal is reinvested in another bond at the bond ladder's longest maturity date (10 years in this example).

A Happy Retirement

March 15, 2018

So what makes a retiree happy in retirement? This is an important question, since you could spend 25 to 30 years in retirement. Knowing what makes retirement pleasurable for other retirees may help you plan your retirement.

A Guardian for Your Children

March 15, 2018

For parents with minor children, the most important reason for estate planning is to ensure that provisions have been made for their children. Some items to consider include:

0% Capital Gains Tax Rate

March 15, 2018

From 2008 to 2010, the capital gains tax rate for individuals in the 10% or 15% tax bracket will be 0% (down from 5% previously). After 2010, the rates will revert to pre-2001 rates unless further legislation is passed. Who will benefit from this reduction?

A Dream Is Not A Plan

March 15, 2018

Year after year, funding retirement consistently comes up in surveys as the most worrisome financial concern on people's minds. Yet, most people spend more time planning a vacation than they do planning for retirement. Here are some of the vacation questions everybody asks themselves:

5 Estate-Planning Tips For Your Dependents

March 15, 2018

When you have people who are dependent on you, like children or elderly parents, you want to ensure that they will be well taken care of in the event you can no longer care for them. Here are five tips for creating an estate plan that will ensure your dependents are taken care of according to your wishes.

4 Reasons To Create An Estate Plan

March 15, 2018

From the clothes on your back to the roof over your head, the money in your checking account and your 401(k) plan, every asset you own (and most of your liabilities, too) is part of your estate. Your earthly possessions - financial and otherwise - will be left behind after your death. To whom?That is exactly the question an estate plan, when it's prepared correctly, will answer.

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Newsletter Archive

The Benefits of Dollar Cost Averaging

Working Longer

Reviewing A Company's Annual Report

Retirement Planning Throughout Your Life

Working Toward Your Financial Goals

The Basics of Earnings

The Basics of Dollar Cost Averaging

Setting Limits

Setting Goals

Review Your Life Insurance

The Importance of Life Expectancy

Should We Worry About the Deficit?

Raising Financially Responsible Children

The Problem with Average Returns

Teaching Important Financial Lessons

Should You Invest or Pay Off Debt?

Selling Your Home at a Loss

Reducing Your Debt

The Basics of Growth and Value Investing

Your Financial Game Plan

The Pleasant Burden of Living Longer

Saving and Investing for College

Reviewing Your Insurance Policies

Reverberations of the U.S. Debt Downgrade

Retirees And Their Investments

Reevaluate Your Investment Strategy

The Costs of That Second Income

Save Your Money or Pay Off Debt?

The Fundamental Investing Principle

Retirement Derailers

Why Inflation Can Be Good

Working With a Financial Advisor

Retaining Financial Information

Things To Consider When Relocating

Should You Own Or Rent?

Seven Ways to Pay Less for College

Risk Management Techniques

Retirement Plan Checkup

Remain On Track

Reevaluate Life Insurance at Retirement

Reducing Life Insurance Premiums

Your Marginal Tax Rate

Lifestyle Affects Your Life Insurance Premiums

Helping Parents With Their Finances

Financial Thoughts XIV

Financial Thoughts XIII

Financial Thoughts XII

Donating Your Vehicle To Charity

Countdown to Retirement

Back to Basics With Bonds

How Will an Aging Population Affect the Economy?

Your Emergency Reserve Fund

Who Pays Federal Income Taxes

Who Is Affected By The AMT?

When Should You Sell?

What Is Your Bond Yielding?

What Is More Important

What Is Monte Carlo Analysis?

What Are ADRs?

Watch Out for Internet Fraud

IRA Distributions for Charitable Contributions

Using Average Returns

Undoing a Roth Conversion

Check All Factors Before Switching Jobs

Spending Your Assets

Life Insurance and Estate Planning

Know When You Want To Exit

Is Economic Inequality Increasing?

Investing Tendencies

Gifting Carefully

Get The Basics Right

Finding Money To Save

Financial Thoughts XXVI

Financial Thoughts XXV

Financial Thoughts XXIV