Deciding to hire a financial advisor can be a tough decision for many investors. Once you’ve made this decision, how do you go about finding the right advisor for you?  Here are six questions to ask when choosing a financial advisor:  How do you get paid? Fee-only advisors receive no compensation from the sale of investment or insurance products. When selecting a financial advisor, ask yourself whether you feel that a financial advisor who receives a significant portion of their compensation from the sale of financial products can really be counted on to recommend so ..read more

With the new year upon us, it’s a good time to be sure you understand the contribution limits for various retirement plan options so you can contribute as much as possible. As you look at your financial planning for 2021, you will want to maximize your retirement contributions to meet your retirement savings goals. Retirement plan contribution limits for 2021 didn’t increase by a lot, or at all in some cases, over the limits for 2020. Here are the 2021 retirement plan contribution limits for some popular retirement savings options. 401(k)  The contribution limits for 2021 remain at: $1 ..read more

For many of us, our 401(k) plan is our main retirement savings vehicle. The days of a defined benefit pension plan are a thing of the past for most workers and we are responsible for the amount we save for retirement and how we invest that money. Managed properly, your 401(k) plan can play a significant role in providing a solid retirement nest egg. Like any investment account, you need to ensure that your investments are properly allocated in line with your goals, time horizon and tolerance for risk. Photo by Aidan Bartos on Unsplash You should thoroughly review your 401(k) p ..read more

In light of the recent stock market volatility, it’s important to review your asset allocation and consider rebalancing your portfolio if needed. This post looks at some ways to implement a portfolio rebalancing strategy. Here are 8 portfolio rebalancing tips that you can use to help in this process. Set a target asset allocation  Your asset allocation should be an outgrowth of a target asset allocation from your financial plan and/or a written investment policy. This is the target asset allocation that should be used when rebalancing your portfolio.  Establish a time frame to ..read more

A recent CNBC article indicated that 58% of those who responded to a 2019 TD Ameritrade survey felt that a $1 million retirement nest egg would be sufficient to fund a comfortable retirement. This may or may not be the case depending upon your individual situation. To me it seems more meaningful to look at the level of income you’d like to generate in retirement and then determine if a given lump-sum, combined with other sources of retirement income, will support that income stream. Let’s take a look at what it takes to provide $100,000 income annually during retirement. The 4% rule  Th ..read more

A Roth IRA conversion can be a good idea for many investors. Whether or not they are a good idea for you in 2020 or in any year will depend upon your unique situation. That said, 2020 is shaping up as a year where a number of factors that could make a Roth IRA conversion desirable for many people are all coming together. What is a Roth conversion?  A Roth IRA conversion is a conversion of some or all of the money in a traditional IRA account to a Roth IRA account. The funds converted will be taxed with the exception of value of any after-tax contributions made to the account. A Roth con ..read more

Companies will use buyout packages for groups of employees from time-to-time to provide those employees an incentive to leave the company. The company may have a variety of reasons behind their desire to reduce their workforce, such as reducing expenses or realigning business units. With the drastic economic impact the coronavirus pandemic is having on a number of businesses, I would expect there to be a number of new buyout offers now and afterwards as companies assess the changes in their business models as a result of this situation. Many companies offer employees a buyout package to enco ..read more

This was already a year of change for those impacted by required minimum distributions (RMDs). The SECURE Act signed into law at the end of 2019 includes some significant changes in RMDs starting in 2020. The CARES Act (passed in the wake of the coronavirus pandemic) included additional changes that apply only to 2020. Below is a discussion of some major changes for required minimum distributions in 2020 and what you need to know. The CARES Act and RMDs The CARES Act is a stimulus package geared in large part to providing relief for businesses, but it did contain some portions directed at in ..read more

Update 3/22/2020 – This past week the Federal Reserve saw fit to prop-up money market funds in the wake of the economic turmoil from the coronavirus. Its important for investors to understand the rules surrounding any money market fund in which you hold money, either in your own account or within an employer-sponsored retirement plan like a 401(k). The original post below was posted on July 30, 2014. The Securities and Exchange Commission (SEC) recently passed new rules governing money market funds. These rules are designed to combat liquidity problems should the economy experience another p ..read more

Update 3/11/2020 – We are in the midst of the worst stock market turmoil since the financial crisis in 2008, due to the coronavirus and related disruptions in the economy. It’s times like these that can fuel fear-based selling tactics by many who sell annuities. I have absolutely nothing against annuities, but I feel that no financial product should be purchased based on fear. It will be interesting if the pattern of these fear-based tactics that we’ve seen in the past materializes in this volatile stock market environment. Just like clockwork if we see a prolonged period of volatility you ca ..read more