Archive - January 2010

1
Dollar Cost Averaging: Facts and Myths
2
What Should You Do When You Want to Change Jobs?
3
What Should You Do With Your Investments When the Market Crashes?
4
Should You Convert To A Roth IRA?
5
Are 529’s The Best Way To Save For College?

Dollar Cost Averaging: Facts and Myths

Most everyone has heard the term “dollar cost averaging” (DCA) as a way to invest money into the market. Unfortunately, there is much misunderstanding about the topic including the validity of the process.Back To The Basics For 2010

Let’s look at an example of DCA. Lets say you just inherited $20,000 and you decided to invest it in the stock market. Once you have determined a proper asset allocation (mix of investments appropriate for your risk tolerance, risk capacity and goals) you could invest it all at once or do “dollar cost averaging” into the securities by purchasing a set dollar amount of securities at …

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What Should You Do When You Want to Change Jobs?

Q: I’m thrilled with the progress I’ve made toward my financial goals over the last few years.  I paid off my “bad” debt, and built an emergency fund.  I max out my 401k and my Roth, and rebalance my portfolio every year.  I have the insurance I need.  Heck, it looks like I might even be on track to retire early.  I’m like the poster child for New Means.  So what’s the problem?

I’m starting to really hate my job, my company, and… well, to be perfectly honest… the whole industry.  Lately, the stress has been overwhelming, and I’m starting

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What Should You Do With Your Investments When the Market Crashes?

Q: Every article I read says to stay the course and leave my money where it is through this crisis, but our retirement accounts have gone down a lot, and everyone I talk to is pulling their money out of the stock market. Quite frankly Sherrill, we’re a bit nervous. While I know we’re not supposed to panic – we are! So…my question is…should we be pulling our money out of stocks for some time? Please let me know. I know the stock market has always rebounded, but we seem to be in uncharted waters here.

A: It sure …

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Should You Convert To A Roth IRA?

With a Roth IRA you pay income tax now and not upon distribution.  With a traditional IRA you defer taxes today and pay income taxes upon deferral.  When you convert a Traditional IRA to a Roth IRA you must pay regular income taxes on the amount that is converted.  The advisability of converting to a Roth depends on the length of time you have until you take distributions, your tax rate today and your anticipated tax rate upon retirement and your projected return on your investments.

When you run your numbers through one of the numerous calculators available on the …

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Are 529’s The Best Way To Save For College?

529 plans are great college savings tools because, although contributions are not deductible on a federal tax return, earnings withdrawn to pay for qualified higher education expenses such as tuition, books, and room and board are tax-free. The definition of “qualified higher education expenses” was expanded to include computers for 2009 and 2010.

Although contributions to a Utah 529 plan are not deductible on a federal income tax return, the State of Utah will allow the contributor to claim a 5 percent tax credit on up to $3,480 per beneficiary if the contributor is married filing jointly. A tax credit

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