Target Date Mutual Funds Why I hate them and you should, too
This is Jeff Rose, goodfinancialcents. Today I want to talk about something that I absolutely hate, targetdate mutual funds. What are they If you have a 401K then you've probably seen them. These are the mutual fund or investment options that you'll see that have the year after it. For example, you'll see target date 2040, or target date 2025. Essentially what you are doing is choosing an investment strategy that resembles the year that you expect you will retire. Let's say you plan on retiring around the year 2040. You would then chose that targetdate fund and you set back and let it do its thing.
As you get closer to that year of retirement that targetdate fund will generally get more conservative, hoping to protect what you've accumulated to that point in time. So why do I hate them Why did I use such a strong word I'm usually not that aggressive as you'll see in a lot of my other tutorials, but I'm just not a big fan and here's the reason. When you actually look at these targetdate funds, typically these are structured to where you have anywhere from 1218 different mutual funds in this one targetdate fund. So yes,.
You are diversified. If you actually take those funds on an individual basis and start breaking them down and seeing the fees associated with them, their performance and all the other components that make a good mutual fund, typically in my experience you're going to see maybe seven decent funds in those targetdate funds. The rest of them are just crap, pure crap! There is no way on an individual basis that you would ever put any money in those mutual funds, but you don't see it because it is wrapped in this targetdate fund.
Just here recently I have several clients come to me that had these targetdate funds and in their 401K they had other options. They had several options. Instead of choosing that one default targetdate fund, if they would've done some research and done the a la carte method, as I like to say where they individually pick the mutual funds they have in their own 401K, we were able to show them how they could increase their performance sometimes 123 and in one case 4 more than what they got over the last several years.
Even more so they were able to decrease their risk. We use a term called beta to measure. I don't want to get too technical here, but anytime that you can reduce your risk and generate more return, isn't that what we want to do That is just what the targetdate funds don't do. Yes, you have to do your own research. Yes, you have to tweek it as you get closer to that retirement, but if you're getting that much more return why wouldn't you do it If you aren't comfortable doing it, why not hire a financial planner to do it for.
You so that way it takes away you having to do the research You've got a professional to help you out. That is why I do not like targetdate mutual funds. I have a blog post that is going with this tutorial that actually shows you the real returns of the targetdate funds versus the a la carte method that we were able to do. Check out the returns. If you have any questions, Good Financial Cents is where I'm at. That's where I'm at, so come check me out. We'll.
short answer why are small business 401ks so expensive
This is a much shorter version of a way too long tutorial I did where a detailed explanation of why small business 401k's are so much more expensive to participants and to providers than larger businesses 401 K and indeed they are more expensive from my book of benchmarkes where I can benchmark your plan expenses and performance if you are contributing to a 401k sponsored by small business your expenses average 1.5 percent of plan assets each year. So for every thousand dollars you have in the plan fifteen dollars every year.
Get taken out to cover plan costs one way or another you and most of the time you don't even see those payments and you don't know where to look all you know is by the time you retire you're hundreds of thousands of dollars behind what you'd be you have been putting that money into a large business 401k If you want proof that lowering plan fees by one percent will save hundreds of thousands of dollars by the time you or your participants retire click here. OK. Here's the answer.
Why small business401k's are not nearly as good a deal because small businesses don't have any employee whose only task is negotiating fees and services the boss is busy HR departments busy and if there's a benefits expert in the HR department they're busy with health care benefits. Usually small businesses end up going to an expert you don't always get from the best deal the experts sell small businesses a supposedly FREE PLAN but the participants get a menu of funds that don't have very many good choices the expense ratios in those funds pay commissions.
Back to the experts the stockbroker the adviser the 401k company the insurance company whoever sold you that planned and these experts make the solution seem more complex than it has to be like they're the only way to get you through the minefield they tell you all the horrible things that can happen instead of giving you lowcost ways simple ways to avoid the minefield That's why small businesses need a 401k advisor like me, a FEE ONLY adviser who gets no commissions to help negotiate a 401 k plan to help design.
401 k plan that has much lower fees that don't leech out each participants accounts every year on my example if you want to see a play and 0.5 0.6 percent range, a full percent lower than average. The average is not good plus I offer more services for that price I don't just compete on price I compete on bringing large company services to small company 401k's it's not that hard to migrate to a better plan it'll save you money very first year a good plan administrator can make those conversions troublefree.
So it doesn't take a lot of Your time. it's not that complicated A plain 401 K doesn't have to pick you through a minefield I pick out and service a plan design and providers that don't go anywhere near the minefield thanks for watching this tutorial if you questions about this tutorial my other tutorials or plan costs in general give me a call or if you want watch much longer tutorial where I go into to much greater detail where smaller plants get um. um not as good a deal. Thanks for watching.
Gold IRA Investing How To Set Up Your Gold IRA
Hi, Doug here from Investing In Gold Advice dot com. In this short tutorial I'm going to give you the resources for setting up your Gold IRA very quickly and easily. It continues to amaze me that so few people realise that they can include physical gold in their retirement plans, and that many of those who do assume that it will be a complicated and time consuming process. That just isn't the case, and it's for that reason that I've written a comprehensive report about Gold IRA's which you can download within the next few minutes completely free.
Of charge. I've been successfully trading and investing in gold since 2003 and I created my website Investing In Gold Advice dot com to share with you the knowledge, experience and contacts that I've gained during that time. Go there now and you can grab my Gold IRA Report without even having to submit your email or join a mailing list. Once you've downloaded it you will have instant access to information about what a Gold IRA actually is and what you can include in it. It answers the most Frequently Asked Questions about Gold IRAs.
It explains all the benefits to be gained by including physical gold in your retirement plan. It explains the procedures involved in setting up a Gold IRA. Actually I do that by giving you a step by step walkthrough of how I set my own one up. Then finally it shows you how and where you can get free expert assistance to get started right away with your own Gold IRA, and how you can save all the initial set up fees. To get this free report go to Investing In Gold Advice dot com. Simply click on the link.
Roth IRA Calculator Free Roth IRA Calculator
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Ira rollover rollover kit gold ira rollover ira rollover kit Roth IRA Calculator And FREE Gold IRA Rollover Kit FREE Roth IRA Calculator bankratecalculatorsretirementrothiraplancalculator.aspxixzz2tpi7s5Ga We provide a Roth IRA calculator and other 401k calculators to help consumers determine the best option for retirement savings. Compare how much you need to save in a Roth IRA versus a traditional IRA. Simply enter your current age, desired retirement age and income. A FREE online inflation adjusted Roth IRA calculator that takes both annual and monthly contribution. Totally FREE Roth IRA Calculator. This calculator.
Lets you see how a Roth IRA will fit into your own plans. Using age, life expectancy, current funds and annual contribution data, this retirement calculator provides annual income and Roth IRA balance when retired. Use our Roth IRA conversion calculator to determine if you qualify to convert your traditional IRA to a ROTH IRA. See if converting to a Roth IRA makes sense for you. Use this Roth IRA Calculator to compare estimated future values and taxes. Use this calculator to compute the amount you can save in a Roth IRA where.
You pay taxes on your income now, but withdraw the funds taxfree in retirement. The Roth IRA Calculator will help you determine if it makes sense for you to convert to a Roth IRA. Creating a Roth IRA can make a big difference in retirement savings. There is no tax deduction for contributions made to a Roth IRA, however all future earnings are sheltered from taxes. The Roth IRA provides truly taxfree growth. on the FREE Roth IRA calculator link below to determine how much can be saved for retirement.
There is NO Debt Crisis!
Yesterday he said you know we have a debt crisis blind well we don't have that debt crisis the what is the crisis i mean we had there's plenty more revenue for us to get out there we have we're pulling in revenue rates did fifteen percentage atp we haven't seen this in ages part of that's because of the recession in part of it is because the bush tax cuts so you could raise uh. revenue by gifts in the if dignity of the definition of a crisis that you have.
Some type of problem what is the problem with the deck right now given urgent problem with the dead you know we were urging problem when joblessness i mean it's like uh. it's like saying can you explain why we don't have a tsunami crisis well because there's an absence of an impending tsunami hitting us uh. people are still loaning us money pat rates that a actually profitable for us to borrow the money i'm talking about the us government there is simply no reason to believe that our debt is causing any type of.
Crisis there's no there are no implications to our debt at least shorter nearterm certainly none that are at the well i'm not that there's none that i mean do you know you want to talk about longterm debt increase taxes deal at all the bush tax cuts expire you reduce the deficit within died or no couple of decades and you starting year wait the debt but uh. what is the crisis and um. i think will uh. will hear from uh. some uh. amman and modern monetary theorist mccumber into a startling.
Understanding the Roth IRA
Traditional or Roth Might not be the easiest question to answer, or understand. Taxfree withdrawals on contributions and earnings Now you might be interested. When choosing between a TIAACREF Traditional IRA or Roth IRA, you should know some of the key differences, and how they can impact and benefit you. Since its creation in 1997, the Roth IRA has become an important investment tool for millions of individuals to help achieve their financial wellbeing. Its success lies in its flexibility with both new and seasoned investors. Two key benefits are taxfree growth opportunity,.
And taxfree qualified withdrawals. Unlike a Traditional IRA, contributions to a Roth IRA are nondeductible however your earnings have the opportunity grow tax free. Earnings and contributions from your Roth IRA will be taxfree assuming they are qualified withdrawals. This means your account has been open for at least 5 years and you are older than 59. Other qualifications may apply. Additionally, you can withdraw your contributions at any time both tax and penalty free. Finally, there are no Required Minimum Distributions. So if you don't need the money at age 70 , you can leave it where it is.
You may want to consider taking advantage of a Roth IRA's taxexempt savings assuming you are eligible if any of the following apply You don't qualify to make a tax deductible contribution into a Traditional IRA You think you might be in a higher tax bracket during retirement You would like to leave income tax free assets to your heirs You may want to retrieve your original contributions before retirement You are age 70 or older, have earned income, and want to continue investing in an IRA Different retirement needs require different.
Personal Finance 401k How to Borrow Money From a 401k
My name is Philip Beningoso, I'm an investment professional, and I'm going to be discussing, how to borrow money from your 401K. Now, as your career progresses, you may need to take money from a 401K to cover some unavoidable expenses. You might need to purchase a house, or pay some advanced education, or keep expenses, medical bills at bay. The limitations of 401K lending for the average consumer means, you need to observe federal law, and avoid excessive penalties. Let me take you through a few quick steps that can make this process easier for.
You. Step 1, is to take out a loan of up to half your total principal in order to payoff important financial obligations. The federal government caps that cumulative amount of loan in a given year to 50 thousand per account 2, establish a budget that helps you pay back the money you borrowed from the 401K account 3, read through your 401K plans fine print, to determine whether there's a minimum loan level for each transaction. Now some 401K providers require a minimum amount to be borrowed from step 4, search your 401K's information.
To assess restrictions on the number of loans and transactions you can take from your account 6, is to maintain steady employment as you borrow 401K funds, to avoid withdraw fees and penalties and 7, plan your monthly budget accordingly to the repayment amounts taken from each paycheck. The information provided here, is for informational purposes only, and should not be considered an individualized recommendation or personalized investment advice. Any investments or strategies mentioned here may not be suitable for everyone. My name is Philip Beningoso, and I'm an investment professional.
Mutual Funds That Could Kill Your 401k Investment
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