Brandon Renfro, Ph.D.

Retirement - Finance - Investing

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Why are investor’s returns often different than the investments they hold?

The research on investor performance is clear. The average mutual fund investor tends to have worse returns than the average mutual fund. Behavioral factors have a lot do with this. People tend to be emotional, and can often react in precisely the most incorrect way possible when markets are volatile. Fear often causes investors to sell investments when they are down. Performance chasing is another notable behavior. Heard a lot about the latest mutual fund that is performing so well? That’s probably not the time to buy it, yet many are tempted.

However, it isn’t always investor behavior that drives a departure from their own returns and that of the investments they hold. Often, it’s simply a mathematical function of the way so many of us save for retirement. In fact, employing a systematic saving strategy can have the opposite affect of a bad timing decision and amplify the investors return.

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How to Handle an IRA Inherited from your Spouse

When someone passes away leaving money in a traditional IRA, the money will go to whomever is listed as the beneficiary of the retirement account. That is simple enough, and is accomplished by writing names in the appropriate blocks on the IRA form. Done.

However, what is the person that inherits the account supposed to do with the money they have received from the unfortunate death of a loved one?

The answer depends on your relationship to the deceased owner of the retirement account. The IRS rules lay out two paths to follow. One path is for the still-living spouse of the deceased account owner… the spousal beneficiary. The other is for everyone else… non-spousal beneficiaries.

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Retirement Saving/Planning Tips for Millennials

It is no secret that Americans have a tough time saving for retirement. This is particularly true of millennials. The Great Recession has delayed the beginning of well-paying careers for many 18 to 34 year olds. A recent study showed that millennials fear running out of money in retirement, but if you are struggling to pay rent, make a car payment and pay off student debt, saving for retirement is not easy.

Yet if millennials want to ensure themselves comfortable “golden years,” then they have to start investing in their future now, today.  Thinking, “I’ll start saving as soon as I get a raise,” or “I’ll start after at the beginning of the New Year” are surefire ways to never start saving. Before you know it you will be 60 years old and wondering how you are going to get through the next 30 years.

So where should you begin when it comes to retirement investing? Here a few tips to help.

Start Saving and Be Consistent

While you might not be able to invest a lot now, the important thing is to get started and then be consistent about contributing to whatever retirement vehicle you choose. Every dollar that you invest now will be worth much more by the time that you reach retirement age. As your salary increases over the years, then you can save more.

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