How Interest Rate Changes Affect You


The rise and fall of interest rates is one of the biggest factors influencing the economy and financial markets. It is important to have a basic understanding of how interest rate changes affect your pocketbook and investment portfolio.

Typically the Federal Reserve lowers interest rates to jump-start the economy. Lower interest rates mean consumers may be willing to spend more money and incur more debt. This stimulates the economy in a variety of ways, including increased revenues from products sold to the consumers and taxes generated from those sales. Investors, on the other hand, have a different perspective.

Bond Investors:Read the rest

A Milestone for the IRA


One of America’s most important retirement vehicles is now more than 30 years old — the Individual Retirement Account (IRA) — a tax-advantaged retirement vehicle for individual investors.

The IRA was first introduced as part of the Employee Retirement Income Security Act (ERISA) of 1974 and has grown to be one of the most popular retirement vehicles in America.

Over the years the importance of this investment vehicle has increased dramatically. Changes in the business landscape have forced individuals to pick up the reins of their retirement destinies, particularly as fixed-benefit pension plans continue to taper off and individual retirement … Read the rest

Healthcare and Retirement


The rising cost of health care in America has become one of the primary risks to a financially secure retirement.

Health insurance premiums and medical expenses now consume a hefty portion of retiree savings. And the future looks more troubling. Healthcare costs are expected to continue to increase faster than inflation, and many employers are re-evaluating their ability to offer retiree health insurance coverage.

Strategies for Managing Healthcare Expenses in Retirement

So how can you make sure rising healthcare costs don’t wreck your carefully laid retirement income plans?

  • Leverage COBRA coverage.

COBRA, the Consolidated Omnibus Reconciliation Act, is a federal … Read the rest

401(k): You Can Take It With You


If you contribute to your employer’s 401(k) plan and  leave your job, one of the biggest decisions you will make is what to do with the money in your plan.

Since the federal tax code was changed in 1978 to create 401(k) plans, many individuals have used this type of employer-sponsored defined-contribution plan to save money for retirement in a tax-deferred account. At the end of 2003, these plans had an estimated $1.9 trillion in assets, according to the Employee Benefit Research Institute.

But in our increasingly mobile society, changing jobs is a real possibility. What should you do with … Read the rest

Don’t Overlook Asset Allocation


During periods of strong stock performance, many investors over‑weight stocks to take advantage of outstanding returns. Risk often seems minimal during these times as people watch their accounts grow. Bonds — with their limited returns — are largely forgotten. Invariably, though, the party ends and, all of a sudden, economic turmoil and a stock-market downturn create the opposite effect as investors abandon equities and run for the cover of fixed-income investments.

We believe investors’ asset allocations, or the division of assets among stocks, bonds and cash, have been influenced by market extremes in recent years. Now is a good time … Read the rest

Building Your Financial Safety Net


Investing is important for your future.

Investment planners generally recommend these initial strategies be taken before beginning an investment plan:

  • Establish a cash reserve to cover three to six months’ living expenses.
  • Do not spend more than 35% of your income to pay off debt (including your mortgage or rent).
  • Obtain adequate life insurance — generally eight to 10 times your annual family income.

Then your initial steps should be:

  1. Determine your net worth — your total financial assets minus your debts. To do this, add up the current value of all your assets — real estate, vehicles, collectibles, savings
  2. Read the rest