My blog has moved to it’s own domain www.financialqueen.com. Please check it out there!
Thank you for reading my blog!
July 9, 2009
My blog has moved to it’s own domain www.financialqueen.com. Please check it out there!
Thank you for reading my blog!
July 7, 2009
We are now halfway through 2009. If you do not max-out your 401(k), 403(b) or other employer-sponsored retirement plans with the maximum contribution this halfway point in the year is good time to increase your contribution percentage to get you further towards that goal. Slowly increasing this by 1 or-3% of your pay one or two times a year will ease the decrease in take home pay so that you can easily adjust. This prevents abandoning increased contributions in the future.
Remember those that reach their retirement savings goals have a plan or a process to get there. If you are hesitant, then I suggest looking at the facts. Here is a great 401(k) online contribution calculator. This should be utilized so you understand what the actual amount that will be taken out of your take home pay. Since 401(k) contributions are taken out of your pay before income tax is calculated, then you lower the amount of income on which you will be taxed. Fewer taxes will be taken out. The end result is that the extra 1% contribution, will decrease your take home pay by less than 1%. Look at it as your contribution is “on sale” just like your favorite brand of jeans.
Other times to increase your contribution until you are reaching the maximum include:
Be sure to check with your employer-sponsored plan to see if you can enroll in an automatic increase program that will increase your contribution percentage for you. Life is busy and many of us will not remember to increase that percentage. These options automate the process of increasing your retirement savings for you! Send me a quick email at barbarakingnh@gmail.com if you have any questions.
July 1, 2009
The news is filled with celebrity passings this last week. Ed McMahon lived a long and good life. The other three Michael Jackson, Farrah Fawcett and Billy Mays had not reached conventional “old age”. This demonstrates the importance of estate planning before a health crisis hits or something sudden happens. By estate planning I mean a short list of items:
Without estate planning you are setting your family up for:
Move estate planning to the top of your to-do list so you can live without regret. Also check-in with your parents and siblings to make sure they have taken care of the three questions above. Families are complex and if another member of your family hasn’t taken care of their affairs you may end up dealing with the aftermath.
June 30, 2009
Yes, it is ok to look. As the end of the second financial quarter hits Wall Street it is time to see where things are at in your portfolio. I am frequently asked “Should I even look at my investments, 401k, IRA, 529 savings plan or brokerage account?” In general, my advice has been if you don’t need it tomorrow, don’t obsess and look all the time. Instead take action where you can. This may be cutting back spending, changing investments to adjust for your new risk tolerance or saving more to makeup the gap in your account balances. Here are my Top 10 Reasons to Sneak a Peak.
10. Admit it, you look everyday so why would today be any different?
9. Your mom told you not to look.
8. Finally you’ve made the appointment with a financial advisor and need to know where your 401(k) and IRAs are to prepare.
7. You can’t move forward with your financial plan unless you know where you are today.
6. How else will you know what to complain or brag about at the next BBQ? (Up or down, everyone is talking about the stock market.)
5. It may be time to rebalance your investment portfolio.
4. Good excuse to open that bottle of tequila or wine that you’ve been eyeing to get through the pain.
3. If your risk tolerance has changed because of the market turmoil your retirement investments need to be adjusted accordingly.
2. Relieve stress by printing out your 401(k) or IRA statements and tying them to a bottlerocket on the 4th.
1. You want to retire, it’s time for a new gameplan. Sneak a peak and start today!
June 23, 2009
Always wanted a Roth IRA, but your income exceeds the limits? New way available soon. Income limits for converting IRAs to Roth IRAs are being removed in 2010. You have to pay the taxes now, but then it grows tax free. Why convert in 2010?
I look at this as a rare gift from the government. You have to pay the taxes now, but you would pay taxes upon withdrawal. This provides you with more tax strategy options in retirement.
Great article in Wall Street Journal’s weekend edition about these changes. Will definitely be topic of future posts as we approach 2010. Start talking to your accountant now!
http://online.wsj.com/article/SB10001424052970204612504574193480955034164.html
June 17, 2009
Maybe it will and maybe it won’t. Let’s consider why organizations eliminated or reduced 401(k) matching contributions.
A poor economic climate reduced revenues, which led to a reduction in expenses. To your company the 401(k) match is an expense. As companies learn to run leaner it will be difficult to bring back an expense. Until employers are competing for employees again, I do not believe this will be an area of focus for most organizations.
I truly believe that companies will have all intended to bring back the 401(k) match. In reality, my prediction is many will bring it back when the economy has full recovered, but it will be smaller than before. While the match may seem small, how your company deals with employee retirement plans has a huge impact on your overall financial plan.
Here is how one Fortune 50 company has evolved it’s employee retirement options over the last decade. Imagine that 10 years ago your employer had a defined benefit pension plan when you joined. You knew then it was a great retirement benefit. Then they switched to a cash balance plan with a full 6% match on the 401(k). You are disappointed, but the full 6% match is one of the best out there, so you are still feeling pretty good. Tough times this year and the company has gone to a variable match up to 4%, dependent on company performance. Bad year, you get 0%. The challenge a number of people within 15 years of retirement face is that the pension they thought they would have is gone and if you knew that 10 years ago you might have saved differently.
You could be in a place where retirement savings need to be ramped up to hit your goals. Action Item: Sit and figure out how the changes in your employer sponsored retirement plans impact your financial plan and retirement goals. Make savings adjustments now so you get there faster.
New rule moving forward – Save more and expect less from your company.
Advisory Services offered through Axiom Advisors, LLC. A registered Investment Advisor Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer member FINRA/SIPC Axiom Advisors, LLC and Cambridge Investment Research, Inc. are not affiliated
June 16, 2009