Many market shocks are short-lived once investors conclude the event is unlikely to cause lasting economic damage. Still, major market downturns such as the 2000 dot-com bust and the 2008-09 credit crisis are powerful reminders that we cannot control or predict exactly how, where, or when precarious situations will arise. Market risk refers to the
Answer: Life insurance has several purposes. Its most important function is to replace the earnings that would cease at the death of the insured. For businesses, life insurance is a way to protect key employees and the business itself. A third purpose is to use life insurance to pay potential estate taxes. If you die
In 2016, the first wave of baby boomers turned 70½, and many more reach that milestone in 2017 and 2018. What’s so special about 70½? That’s the age when you must begin taking required minimum distributions (RMDs) from tax-deferred retirement accounts, including traditional IRAs, SIMPLE IRAs, SEP IRAs, SARSEPs, and 401(k), 403(b), and 457(b) plans.
Why consider a rollover? When you roll over a distribution from a 401(k), 403(b), or governmental 457(b) plan, you generally don’t pay any taxes until you receive a distribution from the new plan or IRA. If you take a distribution but don’t roll it over, it will be subject to federal (and possibly state) income
When investing, particularly for long-term goals, there are two concepts you will likely hear about over and over again — diversification and asset allocation. Diversification helps limit exposure to loss in any one investment or one type of investment, while asset allocation provides a blueprint to help guide your investment decisions. Understanding how the two
Life insurance is an agreement between you (the policy owner) and an insurer. Under the terms of a life insurance policy, the insurer promises to pay a certain sum to a person you choose (your beneficiary) upon your death, in exchange for your premium payments. Proper life insurance coverage should provide you with peace of
Employer-sponsored qualified retirement plans such as 401(k)s are some of the most powerful retirement savings tools available. If your employer offers such a plan and you’re not participating in it, you should be. Once you’re participating in a plan, try to take full advantage of it. Understand your employer-sponsored plan Before you can take advantage
You’ve probably heard the news that the Federal Reserve has been raising its benchmark federal funds rate. The Fed doesn’t directly control consumer interest rates, but changes to the federal funds rate (which is the rate banks use to lend funds to each other overnight within the Federal Reserve system) often affect consumer borrowing costs.
Answer: First, consider putting the money into a safe, liquid account such as a savings or money market account until you have time to take stock of your situation. Don’t spend or invest your windfall until you have a chance to: See a tax professional and analyze the tax consequences–you may need a big portion
Answer: To answer this question, you must decide how your money can work best for you. Compare the money you might earn on other investments with the money you would pay on your debt. If you would earn less on investments than you would pay on debts, you should pay off debt. Let’s assume that
