Archive - November 2011

1
Now You Can See How Much Your 401k Charges You Every Year
2
Here’s What’s Really Causing the European Debt Crisis
3
The 8 Biggest Tax Provisions Expiring This Year
4
The Problem with Thinking You Can Time the Market
5
How Much Should You Save in Your 401k?

Now You Can See How Much Your 401k Charges You Every Year

Next year, 401(k) plan participants will see the true cost of their retirement accounts for the first time – and many will not be pleased. In April 2012, long-awaited Department of Labor rules designed to improve fee transparency in 401(k) plans will go into effect. Consequently, many employers are changing their 401(k) plan provider in an attempt to lower investment fees and provide stronger investment options.

There is an old myth that 401(k) plans are “free.” In fact, in a 2011 survey conducted by AARP, 71% of plan participants thought they paid no 401(k) fees. For this reason, expect to …

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Here’s What’s Really Causing the European Debt Crisis

In May 2010 the Eurozone countries and the International Monetary Fund agreed to a €110 billion low interest loan for Greece, conditional on the implementation of harsh austerity measures. The Greek bail-out was followed by a €85 billion rescue package for Ireland in November and a €78 billion bail-out for Portugal in May 2011.

Also in May 2010, in exchange for promises by its troubled members including Greece, Ireland Portugal, and Spain to implement significant austerity and other fiscally responsible measures, the EU approved a comprehensive rescue package worth €750 billion (then almost a trillion dollars). It is aimed at …

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The 8 Biggest Tax Provisions Expiring This Year

There are quite a few tax provisions that will be expiring at the end of 2011 – nowhere near the number of provisions that were set to expire at the end of 2010 (many of which were subsequently extended), but still there are quite a few sun-setting this year.

Listed below are some of the major provisions that will expire at the end of 2011 that will affect individual taxpayers.

Charitable Contributions from IRA The provision that allows an IRA owner, subject to Required Minimum Distributions (RMDs) and over age 70½ to make a Qualified Charitable Distribution (QCD) directly to …

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The Problem with Thinking You Can Time the Market

Do you – or someone you know – move in and out of investment holdings in order to “boost your return”? If you do, it’s worth considering the downside. Studies consistently show that market timing (you go into investments when they seem good, exit when they don’t) undermines your ability to make investment progress.

Consider the fact that retail (individual) investors typically flee from markets when the bad news already is reflected in prices, and typically try to climb back in when prices already have moved higher. Instead of buying low, selling high, individual investors tend to do the opposite.…

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How Much Should You Save in Your 401k?

If you are one of the millions of Americans who contribute to a defined contribution retirement plan, there are two reasons to rethink the level of your contribution for 2012.

The first is that it is well established that contributing less than 10% of your salary diminishes your chance for meaningful retirement income. If you are not maxing out the annual deferral limits, review the level of your current deferrals. If it is less than 10%, implement a strategy to raise the percentage that goes to your retirement account.

If you don’t recall your current deferral percentage, ask your HR …

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