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Future Value Calculator chart

Future Value Calculator

You can use this future value calculator to find the future value of a lump sum or stream of regular savings. For example, if you invest a certain number of dollars today, once, and let it earn interest for a predetermined number of periods, what is it worth in the future? Or, if you regularly …

what is a vested balance piggy bank

What is a Vested Balance?

Your vested balance is the amount of money in your retirement account that belongs to you. If you quit your job or leave your employer, your vested balance is the portion of the money that you can take with you. What Does Vested Mean? According to Webster’s, vested means: Fully and unconditionally guaranteed as a legal …

Brandon Renfro and Harry Markowitz

Meeting Harry Markowitz

Fair warning, this post is a departure from my normal articles on retirement planning. I had an opportunity to meet one of the founding fathers of modern finance, Harry Markowitz, in June of 2019 and I simply want to share the experience with you here. Harry Markowitz isn’t a household name, but the work he …

Inflation sign

What Is Inflation?

What is Inflation? Inflation is the gradual increase in prices over time. Specifically, it refers to changes in the Consumer Price Index. Understanding how price changes rise over time can help individuals budget and plan for the future. Businesses need to understand it to remain profitable. Policy makers need to know it as well to …

woman wondering Can I Contribute to an IRA if I am Retired

Can I Contribute to an IRA if I am Retired?

The simple fact that you are retired doesn’t mean you can’t contribute to an IRA. You can still contribute to an IRA if you are retired, but you need to have earned income. This is the same condition you had to satisfy before you retired. Be careful though. Not all income is considered earned income …

can I retire on 500k nest egg

Can I Retire on 500k?

It is possible to retire on 500k in retirement savings, but you’ll need to do some careful planning. There aren’t many universal answers to retirement questions like this one. You need an individualized answer. I’m going to show you a simple process for answering this question. Whether you can or not depends largely on how …

Does Employer Match Count Towards 401k Limit

Does Employer Match Count Towards 401k Limit?

There are two different annual limits on 401k contributions. The elective deferrals limit, and the annual additions limit. Your employer match counts toward one, but not the other. Elective Deferrals Limit The money that you have withheld from your pay to go into your retirement account is an elective deferral. You might see this called …

fund of funds newspaper

Fund of Funds Explained

A fund of funds is a collection of mutual funds bundled together. By combining different mutual funds into one package, the fund of funds purpose is to give you a single-choice investment solution. You’ll sometimes see a fund of funds abbreviated as FOF. This can simplify your investment process, but you need to understand how …

market risk premium chart

What is the Market Risk Premium?

The market risk premium is the return that you earn on stocks above what you could earn by investing in government bonds. For example, if the rate of return on the market is 15% when the rate on a government bond is 3%, the market risk premium is 12%. A more formal way of defining …

702(j) retirement plan is insurance

702(j) Retirement Plan: Worthwhile?

A 702(j) retirement plan really isn’t a “retirement plan” at all. It’s a cash value life insurance policy sold as a retirement plan. You may have heard the spiel. The promise of a 702(j) plan is tax-free retirement income. It is possible to access the cash value in a life insurance policy tax-free, but there …

tax-gain harvesting calculation

Tax-Gain Harvesting?

Tax-gain harvesting may seem counter-intuitive, but it can be an effective way to reduce your total tax burden in retirement. Mindful tax planning is one of the easiest ways to improve your finances in retirement. What makes that true is the fact that current tax rates are known, so any time you make a decision …

what is an in-kind distribution

What is an In-Kind Distribution?

In-kind distributions can sometimes provide tax or other benefits that a cash distribution doesn’t. So what is an in-kind distribution? Any distribution NOT made in cash. For a retirement account, that would typically be a distribution of stocks, bonds, mutual funds, or ETFs. In the case of an inheritance that would mean you would receive …

Couple discussing their 401k withdrawal age

401k Withdrawal Age: How Does it Affect You?

There isn’t a magic or standard 401k withdrawal age. You can withdraw from your 401k at any time. Of course, you’ll likely owe taxes and possibly penalties if you do. Beyond a certain age you may be required to withdraw. However, the consequences of a 401k withdrawal are very different depending on your age. Most …

Roth 401k vs Roth IRA

Roth 401k vs Roth IRA: Should I Roll it Over?

When choosing between a Roth 401k vs Roth IRA, there are a few similarities and differences you need to be aware of. It’s customary to roll Roth 401ks into Roth IRAs at retirement for better options and more control. However, Roth 401k withdrawal rules differ from the rules for Roth IRA withdrawals in several ways. …

Mega Backdoor Roth IRA

Mega Backdoor Roth

A Mega Backdoor Roth is a conversion strategy that allows you to save a much higher amount in your Roth IRA than you are allowed to through direct contributions. Using a mega backdoor Roth is also a way that you can contribute to a Roth IRA if your income is above the phaseout limit and …

what is a money market account newspaper

What is a Money Market Account?

Money Market Accounts, or MMAs, are a type of savings account that pay a higher rate of interest than you typically earn on a standard savings account. Because they are highly liquid, money market accounts can be a good choice for the cash portion of savings. There are a few things to be aware of …

tax-free municipal bond interest

Tax-Free Municipal Bonds

One of the easiest ways to increase your retirement income is to reduce your tax bill on that income. With tax-free municipal bonds you can reduce that tax bill to zero and enjoy tax-free retirement income. If you loan money to state and local governments by purchasing municipal bonds, the interest you receive is normally …

Woman calculating an emergency fund cd ladder

Emergency Fund CD Ladder

An emergency fund CD ladder can be a good tool to earn a little higher rate than you would likely get if you simply kept your emergency fund money in a checking account. One of the most basic components of a financial plan is an emergency fund. Keeping readily accessible cash on hand can help …

Checking the bond price calculator

Bond Price Calculator

To use this bond price calculator simply select the item that you would like to solve for and input the variables that you know. Below the calculator you’ll see instructions to solve for anything you can use a bond calculator for to include tax-free equivalent municipal bond yield. A few quick notes… Coupon A bond’s …

Is $600,000 Enough to Retire?

Is $600,000 Enough to Retire?

If you have $600,000 saved toward retirement can you retire? It may be possible. It really all depends on what is important to you in retirement and how much income you need for a comfortable retirement. To figure out if $600,000, or any amount, is enough for you to retire on you’ll need to consider …

Company stock price in stock market

Should I Hold Company Stock in My 401k?

Should you hold your own employer’s stock in your 401K? The conventional answer, and my default response, is… no. However that is a topic that is worth some discussion. While I wouldn’t encourage you to buy your employer’s stock in your 401k plan it doesn’t necessarily follow that you should immediately sell it if you …

Two Mend Discussing the Normal Yield Curve

Normal Yield Curve: What Does it Mean?

The yield curve is a popular economic indicator. It is a graph of the yield on bonds with different maturity terms, and often used to gauge the direction the economy is headed. Although you can create a yield curve from the yield and maturity of any type of bond, “THE yield curve” usually assumes we …

Will Working Longer Affect My Retirement?

Will Working Longer Affect My Retirement?

Will working longer affect your retirement? Of course. But how much longer and how big of an impact will it make? That question will lead you down a much more useful thought path. There are many things that will affect how long you are in the workforce. Some of these things you can’t control (such …