You may want to try a combination of both. With this strategy, you take out a 30-year mortgage but plan to put extra payments toward principal over the loan to pay it off sooner. There are many ways to do this (putting extra toward principal each month, putting big chunks down here and there), but
Paul Burns | Getty Images Making sure retirement savings last a lifetime becomes increasingly tricky as average lifespans lengthen. In my view, making your money last can largely be boiled down to five key levers. Three are always unknown: investment returns, inflation and longevity. Unfortunately, current conditions further complicate these unknowns. With stock market valuations
PeopleImages | Getty Images Whether a variable annuity is a good option depends on all sorts of related financial considerations, including other sources of income in retirement and your individual situation and goals. Nevertheless, advisors say that in some cases a variable annuity ends up being the best option for a portion of an investors’
Every client is different, and therefore every conversation is different, but there are also a number of similarities. A couple of meetings I had last week demonstrate how similar our conversations can be at times. In two separate meetings with two separate longtime clients, I had the same piece of advice: “Go spend some money”
Folks who were paying 28 percent AMT on ordinary income may now end up paying 35 percent, so they could be worse off with the new plan, Collado said. “At first, we thought AMT repeal would be great for our clients,” said Leon LaBrecque, JD, CFP, managing partner and CEO of LJPR Financial Advisors. “But
While a Roth individual retirement account can certainly help increase the size of your nest egg, it’s always important to weigh the pros and cons before you invest, says Rianka Dorsainvil, a millennial certified financial planner and owner of Your Greatest Contribution. Dorsainvil says it’s important for everyone to understand all the benefits offered when
Nick Dolding | Getty Images A gift seems like a straightforward issue, but from a tax code perspective, there are some nuances worth noting. Because the estate-tax rate is so high, someone near the end of their life has a strong incentive to give their assets away so their heirs can claim the assets were
So is it possible the retirement crisis is oversold? “It’s not merely possible, it’s probable,” said Andrew Biggs, a scholar with the American Enterprise Institute in Washington and former deputy commissioner for policy at the Social Security Administration. For one thing, he notes that while many contend low-earning Americans aren’t saving enough for retirement, poverty
Financial advisors can deploy a variety of strategies to decrease the toll that taxes can take on retiree clients’ portfolios. The following are three areas of focus. Income: Sources and timing of income can affect tax liability. Retirees with large taxable investment accounts should utilize qualified dividends, long-term capital gains and tax-free municipal bond income,
Socially responsible investing is attracting more dollars than ever. In fact, following the recent developments around the Paris Climate Agreement, many investors are likely asking themselves how they can use their money to make a positive impact. The total U.S.-domiciled assets under management using sustainable, responsible and impact strategies grew to $8.72 trillion, up from
If a new study is an accurate indication of what the investment management industry will look like in a decade, investors are poised to benefit. Released by the CFA Institute, “Future State of the Investment Profession” shows that the trends influencing how money managers and financial advisors run their businesses are pushing them toward a
Morsa Images | Getty Images Seniors who retire a mortgage may enjoy reduced stress, increased cash flow and significant equity cushion. “While some people may claim that they can make 8 [percent] to 10 percent in the stock market while the mortgage may cost them only 3 [percent] to 4 percent, tread carefully,” he said.
A variety of studies have been done to explain this gray divorce trend. But the reality is that years spent raising kids often transforms parents into very different people from who they were when they first got married. Couples discover they have nothing in common, and their children were the glue holding them together. They
The key for investors, as always, is to look forward. And while the recent past has been a great environment for long-only risk assets, hedge funds can provide several unique advantages for investors, including the potential for capital preservation, return enhancement and portfolio diversification. Since World War II, the S&P 500 Index has experienced 10
In the middle of all the excitement that comes with landing that new job, make sure you don’t forget about the retirement money you already socked away in your former employer’s 401(k) plan. That’s the advice offered by Rianka Dorsainvil, a millennial certified financial planner and owner of Your Greatest Contribution. Dorsainvil says it’s important
During the 2004–2006 period of Fed rate increases, for example, REITs posted cumulative total returns of 77.9 percent, compared with 32.5 percent for stocks and 8.6 percent for bonds. REITs own a broad array of property-ownership ventures, including apartments, hospitals, warehouses and commercial property such as hotels, shopping malls and office buildings. The game for
In simple terms, an IRA trust prevents an heir from receiving money outright from the IRA upon the account owner’s death. Without a trust, heirs can treat an inherited IRA as a piggy bank to whatever degree they want, as long as they take required minimum distributions as mandated by the Internal Revenue Service. Unfortunately,
The ability to pay for health-care needs is — and will remain — one of the most critical issues of retirement. Most people today will live longer than their parents or grandparents did. That means they’ll enjoy a longer retirement — but it also means they will most likely need more money to cover health
While those returns are real money, it is important to remember there are, of course, risks associated with investing, as well as eventual tax payments. As such, there are six questions that can help you determine whether deferring compensation is a good choice ahead of the upcoming June 30 deadline: Do I have sufficient liquidity?
“The assumption is that our wealth does us little or no good after we’re dead,” said Steven Sass, a research economist at the Center for Retirement Research at Boston College and author of a recent research brief on the effect of surging retirement on investment returns. However, Sass says these assumptions are too simplistic and
Tetra Images | Getty Images ETFs are traded on exchanges, so they can be bought and sold like stocks through a brokerage. For example, ETFs with “low volatility” or “minimum volatility” in their names can turn out to behave quite differently for investors in precisely the environment that they are most looking for risk mitigation.
Jonathan Alcorn | Reuters A woman holds a ticket purchased for Wednesday’s estimated Powerball lottery jackpot of $450 million in Los Angeles, February 11, 2015. While each of these suddenly affordable opportunities would tempt a newly minted mega-millionaire, none would be the best initial course of action. Just look at the history of lottery winners.
ML has begun to make inroads as asset managers realize that the ability to extract value from big data is going to be a key differentiator — and that traditional industry practices will struggle to stay afloat in this mounting flood of real-time data. Analytics using ML can be more robust than traditional financial modelling,
Congratulations. You graduated from college and just landed that first full-time job. While it’s time to celebrate, it’s also time to make some serious financial decisions. Rianka Dorsainvil, a millennial certified financial planner and owner of Your Greatest Contribution, has some solid advice for you: Enroll in your employer’s 401(k) plan as soon as possible
But these days, she said, ”We see that people are carrying mortgage debt at older ages, and it’s both the percentage of families carrying the debt and the amount of debt that has increased.” About 42 percent of households headed by someone age 65 to 74 has home-secured debt, according to the Federal Reserve’s 2013
“ETFs have gone from representing a very small part of [advisors’] tool kit to now representing a very significant part,” said certified financial planner David Yeske, managing director of Yeske Buie. “One of the things it suggests is that financial planners are ever more convinced that active management is hard,” said Yeske, who helped develop
There are a number of areas to evaluate when you’re seeking to understand just how tax-efficient your financial strategies performed in 2016. First, let’s look at tax-loss harvesting. If you’re not familiar with that term, it is an investment strategy that you can use when you are invested in a holding that loses value. Instead