New Federal Regulation for 401k Fee Transparency Rules

Broken_401k_nest_egg

Do you know how much it costs you on an annual basis to simply participate in an employer-sponsored 401k plan?

If you’re savvy, you probably already know that the mutual funds you select within your 401k plan have expense ratios.  That number shows how much out of every dollar invested you give to the mutual fund company to manage the fund.

On average actively managed mutual funds cost around 1% of invested assets (or $100 for every $10,000 invested).

But if you think that is the only fee being charged to you, prepare for a shock.

New 401k Fee Transparency Rules

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Will Your Investments Cover 30 Years of Retirement?

Imagine working 40 years to fund a retirement that will last for 30; does it sound impossible?  Not if you live in a perfect world—but this isn’t, so that’s why we’ll be talking about whether your investments cover 30 years of retirement here.

A 30 year retirement is becoming the reality for more people all the time. It happens when people retire at 62 or even 65, and then live into their 90s.  This is happening for more people than ever and by all indications it will be even more common in the future.

Even if you don’t think you’ll live into your 90s, prudence dictates that you be prepared anyway. Healthier living and stunning medical advances are causing people to live far longer than they ever expected and the possibility that you’ll be one of them is increasing steadily.

Will you be ready for it financially?
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Playing the Retirement Catch-Up Game in Your Forties

So, you’re in your forties and have little to no retirement savings.  “What shall I do?” you ask yourself.  First thing you need to do is not lose hope.  You have a challenge ahead of you but you can win this battle.  It’s something I like to call “Retirement Catch-Up.”  At its core, it’s a fairly simple game.  You have a certain time horizon and need a certain amount you need before you can retire.  With the proper knowledge, anyone can win this game.

Here’s you have a sort of “cheat sheet” to win the retirement catch-up game:

Max out your 401(k) plan immediately

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6 Things to Consider Before Retiring

After working long and hard for many years, the idea of retiring is very appealing.  However, you do not want to just decide to retire without proper planning. 

There are 6 important things to consider before retiring.

1. Volatility

If you are planning on retiring, the market volatility influences your retirement account when you have stocks or bonds.  The factors that impact volatility include the state of the economy, current events in the world, taxes, changes in the industry, political unrest, natural disasters and war.  Expanding your money out over different types of investments could help control the risk involved.  It is important to keep track of your portfolio, and make sure it is aligned within your goals.  Make sure your accounts are flexible, so you can make changes when needed.Continue Reading

Steps to Take to Avoid Retiring in Debt

Debt trap

National debt is a massive problem in our country and there’s no shortage of advertising reminding us that we need to pay off our personal debts. Sadly, statistics clearly indicate that the numbers of individuals who are retiring in debt are on the increase, so much so that over half of those who retire are in the red.

Earlier this year Newsweek reported that the golden years have been severely tarnished with mounting medical expenses, rising credit card debt, and little or no savings.  Newsweek stated that a law professor at the University of Michigan found that individuals over the age of 55 now account for more than 20 percent of all bankruptcies in the U.S.  CESI Debt Solutions, a nonprofit personal-finance firm, conducted a study and discovered that 56 percent of retirees carried outstanding debts with them as they left the workforce.
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IRA Maximum Contribution Limits – Roth and Traditional

Roth IRA Contribution Limits 2011

An IRA can be a great tool to help you save for retirement and the traditional and Roth both have interesting tax advantages. But the amount you can contribute every year is limited.  The Federal government imposes limits as to how much money can be contributed to both the Roth IRA and the traditional IRA accounts.  An account holder’s age (and income) is also a factor in how much s/he can contribute per year.

The investors who are 49 years old or younger have had maximum limits that are $1,000 less that those investors who are 50 years old or older since the 2006-2007 investment year.

The nature of this investment fund demands that an investor contributes the maximum amount of contribution allowed every year in order to enjoy maximum yield.  For example, the contribution amount for a person 49 years of age or younger in 2010 was $5,000.  If he only invests $3,000 in 2010 he can’t add the $2,000 deficit to the $5,000 contribution allowed in 2011.  The IRA is a “use it or lose it” investment fund which means any money not invested into an IRA is lost forever.Continue Reading

Best Retirement Plans For The Self Employed or Small Business Owner

This is a guest post by Jeff Rose. Jeff Rose is an Illinois Certified Financial Planner and co-founder of Alliance Investment Planning Group.  He is also the author of Good Financial Cents, a financial planning and investment blog and he is currently working on his first book entitled Soldier of Finance.  You can see more about his mission at the same titled blog Soldier of Finance.com.
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