Many people use plan-level rates of return to determine the quality of an investment lineup. However, several variables may impact plan-level rates of return making them not as useful as a plan management tool. They may actually be counterproductive when trying to determine the quality of an investment lineup. As an extreme example, you may have a lineup full of excellent mutual funds, but if … Continue reading Plan-Level Rate of Return—Useful or Useless?
For most employees, qualified retirement plans are a critical component of their retirement savings strategy. For others, qualified plans place restrictions on their utilization of such plans, so they have to look for other ways to save. That’s why employers often offer both qualified and nonqualified plans. Why are there two classes of plans, and how do they differ? In the simplest of terms, qualified … Continue reading Qualified Versus Nonqualified Plans
If you have ever opened a brokerage account with an advisor, you know the first step is gathering information to determine the risk profile and appropriate investment allocation for the individual. In order to determine the appropriate allocation for a client, financial advisors will inquire about income level, savings rate, net worth, time horizon, spending needs, investment knowledge and most importantly risk tolerance. Based on … Continue reading Target Date Funds—Does One Size Really Fit All?
1. Don’t cash out retirement plans when changing employment When you leave a job, the vested benefits in your retirement plan(s) are an enticing source of money. It may be difficult to resist the urge to take that money as cash, particularly if retirement is many years away. Generally you will have to pay federal income taxes, state income taxes, and a 10 percent penalty … Continue reading Four Tips for Increasing Your Retirement Dollars