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Why You Need To Be Careful With Bond Funds

Not all investors understand the inverse relationship that exits between bonds and interest rates; the fact is when interest rates rise, bond values go down.  To understand this concept let’s break this down to see how a bond works.  Bonds have a stated maturity and a stated interest rate that they declare when they are issued.  The most common types of bonds today are government and co...
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The Math of Gains and Losses

  Here’s an interesting part of investing that most investors get wrong. In fact, if most investors understood this they probably would fire their broker. It has to do with how much it takes in percentage terms for a portfolio to recoup losses after a market correction. So let’s look at this.  If you claim to be a conservative investor, and can handle a 10% loss, then I would agree ...
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Order of Returns Risks Within an Income Portfolio

One of the elements that greatly magnifies the withdrawal risk is the Order of Returns Principle. When your portfolio has losing years it can affect its ability to last through life expectancy more than anything else. The graphs below illustrate this. What’s interesting to note about this graph is that both portfolios earned 8.03% and both Ron and Barb withdrew the same percentage for incom...
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How Much of Your Retirement Savings Can You Afford to Lose?

  Of course when most people answer this question they will usually say, “I can’t afford to lose any of it!” So, with a retirement portfolio that has exposure to the stock market in the form of individual stocks or stock mutual funds, let’s first define a loss.  The easiest way would be when you receive your next month’s statement and you see that your portfolio value has dropped from...
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Life Is More Enjoyable After Retirement

  "Enjoyment of everyday activities increases after retirement, a study from Australia has found."   The heightened level of enjoyment lasts at least a year after a retiree stops working full time, researchers report in the journal Age and Ageing. There is conflicting evidence about changes in enjoyment and happiness when people retire, coauthor Tim Olds of the University of ...
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Why You Need To Rollover your 401k To Save It From Taxes For Your Heirs

Company retirement plans such as 401k’s, 403b’s, and 457 plans are tax deferred accounts that act just like an IRA when it comes to taxation.  At age 70 1/2, unless one is still working and contributing to a retirement plan, you have to start taking distributions.  But what about making sure the beneficiaries stretch out the account as an Inherited IRA?  You will see the company plan in most...
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You Need to Set Up Asset Protection for the Inherited IRA

Asset protection for IRAs is often overlooked. IRA beneficiaries may be exposed to the potential loss of some or all of their inherited IRAs, for many reasons: Loss of the IRA to lawsuits and creditors. State statutes vary on how much they exempt IRAs from lawsuitsand creditors’ judgments. Recent Rulings on a federal level have deemed IRAs to not be creditor proof.  So in the even...
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Important Rollover Information For Your IRA’s & Qualified Plans

Important Rollover Information For Your IRA's & Qualified Plans There is a a lot of confusion regarding all of the rules regarding moving money in or out of retirement plans and IRA’s.  With the potential consequence of having funds that have never been taxed, to all of a sudden become taxable income, creates fear and trembling among many people.  Let’s dive into the do’s and don'ts reg...
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Why The Inherited Or Stretch IRA Usually Does Not Happen

Why The Inherited Or Stretch IRA Usually Does Not Happen Unfortunately, most beneficiaries do not always take advantage of the IRA stretch out after the IRA owner’s death. In fact, often the reality is that beneficiaries will withdraw funds from the IRA much earlier and destroy what for many could be their greatest wealth building vehicle. This occurs for a number of reasons. Somet...
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