The idea of retiring isn’t new. People who grew too old or too ill stopped working and stayed home long before pensions and Social Security. But as people live longer, the retirement experience takes on a different meaning. Not only can you expect more years of retirement than of adolescence, but they can be a lot more satisfying and rewarding. The complication is that you’re faced with a number of decisions, some of them irrevocable. So rather than waiting to evaluate your alternatives until it’s time to choose, it’s smart to start thinking about them now. If you’re paying for individual coverage, the answer is almost certainly yes, as Medicare will be cheaper. If you’re still eligible for your employer’s plan, you may want to wait. The key is that you must have what the government considers comparable coverage. If you do, you can enroll without penalty in Medicare within eight months after that coverage ends. If you don’t have comparable coverage and delay enrolling after you turn 65, you face a permanent surcharge on your Parts B and D premiums for each year you were eligible and didn’t enroll. If you work for a small company, you may be   Read more…

An asset allocation model is a blue- print for spreading your investment capital among different asset classes. The most suitable model varies, based on an investor’s age, economic situation, and tolerance for investment risk, plus expectations about how the market is likely to perform. Comparing different ways to allocate may help you determine the model that might be best for you. AGGRESSIVE An aggressive allocation, which may be appropriate for young people or those with a steady source of fixed income, tends to emphasize equities, with as much as 80% to 90% of the portfolio being invested in stock, stock mutual funds, and stock ETFs. MODERATE A moderate allocation might assign between 50% and 70% of the total to equities, depending on your age, your financial goals, and your other financial resources, with the balance going to fixed income and some cash. CONSERVATIVE A conservative allocation, which may be appropriate for older people wanting to preserve capital and collect regular income, might assign 40% of the total to equities, with the rest divided between bonds and cash, depending on the economy and an investor’s personal financial situation. As you analyze an investment’s return remember that the gains or losses it   Read more…

Your diversified portfolio is likely to be one-of-a-kind because the unique combination of factors that define your goals, timeframe, and risk tolerance won’t be exactly the
 same as any other investor’s. Mutual Funds Provides diversification 
 May not be focused 
 May not be fully invested Index Funds & ETFs (Exchange Traded Funds) Seek to replicate index results Transparency 
 May be more tax efficient 
 Poor performance in down market Individual Securities Investments must be balanced 
 Need a varied, representative sample 
 Can be costly to diversify Performance must be monitored Managed Accounts Professional  management Advantage of multiple managers When you invest for retirement, you can select a portfolio of individual securities, mutual funds, and ETFs or choose a target date fund. Its objective is to build and then preserve assets, so that investors in the fund can look forward to a more financially secure retirement. To meet its goal, a target date fund assembles and regularly realigns a port- folio of individual mutual funds to: Help manage investment risk without significantly reducing return during the fund’s growth phase. Try to provide continued, if some- times modest, growth during the fund’s income-producing or asset-preservation phase Since cost has   Read more…

Rollover IRAs have some unique qualities. You can move any amount into your account, provided you’re moving it from an employer sponsored retirement plan or another IRA. You’re not limited to the annual ceiling on traditional and Roth IRA contributions. Watch part 3 Using a Rollover IRA from the series Saving for Retirement in Your Working Years with syndicated financial columnist and talk show host Steve Savant. You may be able to move rollover IRA assets into a new employer’s plan if the plan accepts rollovers. While some plans may accept any IRA assets, it’s smart to keep your employer plan rollover in its own account to avoid any possible roadblocks. The financial institution where you open your rollover IRA is the custodian of your account. As custodian, the institution is responsible for making the investments you authorize, keeping track of the paperwork, and reporting investment performance and account balances. But because most IRAs are self- directed, the custodian doesn’t make investment decisions on your behalf. Nor does it have fiduciary responsibility for the choice of investments you make. That means if you decide to put all your money into a risky investment, your IRA custodian isn’t responsible for advising   Read more…