July 2013

29 Jul

Mistakes Families Make with 529 Plans

Five common errors to avoid and two big factors to consider.

Most families that start 529 college savings plans have done their "homework" about these programs. Missteps are made, though, often with the distribution of 529 plan assets. Here are some of the major gaffes and the major factors anyone should think about before enrolling.

Assuming a university will withdraw 529 plan assets for you. When the time comes, you have to tell the 529 plan that you need the money and specify the payee. Typically, a 529 program offers you either a check written out to you, to your student, or a payment made directly from the 529 plan to the university. There are two big reasons why a check made payable to the student may be the best option.

28 Jul

Coping with an Inheritance

A windfall from a loved one can be both rewarding and complicated.

Inheriting wealth can be a burden and a blessing. Even if you have an inclination that a family member may remember you in their last will and testament, there are many facets to the process of inheritance that you may not have considered. Here are some things you may want to keep in mind if it comes to pass.

Take your time. If someone cared about you enough to leave you a sizable inheritance, then likely you will need time to grieve and cope with their loss. This is important, and many of the more major decisions about your inheritance can likely wait. And consider, too – when you're dealing with so much already, you may be too overwhelmed to give your options the careful consideration they need and deserve. You may be able to make more rational decisions once some time has passed.

28 Jul

Retirement Saving 101

Retirement may be decades away, but that doesn't mean that you shouldn't be planning now for the time you stop working. But where should you start? Novice investors may be overwhelmed by the different options available to them when it comes to saving for retirement. To help you begin, here is a rundown of some key things members of Gen X and Gen Y need to know about saving for retirement.

Why Save?

If you're young, there are a few good reasons to start saving for retirement now, even though it may be a long time until you plan to stop working.

09 Jul

Quarterly Commentary: Stay Focused When Markets Are Skittish

[caption id="attachment_308" align="alignright"]US-federal-reserveBen Bernanke's June 19 commentary caused quite a stir in the markets[/caption]

Quarter-end numbers are in, and it's no secret that, overall, the markets didn't pose as politely as they did for last quarter's snapshot. We believe the shift tells us more about the continued foibles of reactionary investor behavior than it does about the inherent state of the economy or our capital markets.

Did the Markets Overreact to Bernanke's Commentary?

In fact, Federal Reserve Chairman Ben Bernanke's June 19 commentary seemed to cause trading ripples far greater than the pebble-sized news we believe it represents. All he essentially said was, if the U.S. economy continues to recover, the Fed may begin winding down its lowered-interest-rate support system, so the economy can begin taking deeper breaths on its own.

01 Jul

How Do You Know When You Have Enough to Retire?

There is no simple answer, but consider some factors.

You save for retirement with the expectation that at some point, you will have enough savings to walk confidently away from the office and into the next phase of life. So how do you know if you have reached that point?

Retirement calculators are useful – but only to a point. The dilemma is that they can't predict your retirement lifestyle. You may retire on 65% of your end salary only to find that you really need 90% of your end salary to do the things you would like to do.

That said, once you estimate your income need you can get more specific thanks to some simple calculations.

01 Jul

Have an Extra $1,000? Five Tips for Using a Windfall

Whether it's a tax refund, small inheritance or bonus, many of us will occasionally enjoy an unexpected windfall. It might not change your life in the way a million-dollar inheritance could, but even relatively small amounts of extra cash can help you achieve your long-term goals.

Rather than squandering the funds on small things, use that money in a strategic way. If you make smart decisions today, an extra $1,000 could end up paying dividends for many years. Below are five ways you can use a modest windfall to help you achieve long-term financial goals.

Get Your Finances in Order

If you have high-interest credit card debt, use your windfall to pay down your balance. You could save thousands of dollars in interest by getting rid of that burden for good.

01 Jul

Understanding the Markets

What the acronyms signify and what affects investors.

Dow. NASDAQ. S&P 500. Fear index. NYSE. Commodity prices. Earnings. Economic indicators. These are the gauges and signposts of investing, but if you stopped most people on the street, you'll find they have only a hazy understanding of what these terms signify or reference. If you've ever been left dizzy by the jargon of the financial world, here is a brief article that may help clarify some of the arcana. Let's start on Wall Street.

The major U.S. indices. The Dow Jones Industrial Average tracks how 30 publicly owned companies trade on a market day – the "blue chips", 30 titans of U.S. and global business chosen by the Wall Street Journal, most not actually industrial. The NASDAQ Composite records the performance of 3,000+ companies on the NASDAQ Stock Market (see below), including many technology firms. The S&P 500 logs the performance of 500 leading publicly traded companies across ten different sectors (business/industry categories), as determined by financial research giant Standard & Poor's (there was actually a Mr. Poor, hence the name).1,2