Twin terms that can trip up investors
At one point, investors encounter two similar-sounding but totally different financial terms, and may make a wrong move if they don't understand the difference, according to this article on Morningstar. For example, a 401(k) plan may have a Roth 401(k) and an after-tax feature that receive different tax treatment on the earnings. While taxes have been paid on the contributions to both accounts, earnings in a Roth 401(k) are exempt from taxes, while savings in an after-tax 401(k) grow tax-deferred.
Help your clients beat classic ‘bad habits’
Understanding the excuses for not saving will enable investors to avoid the habit and start building their nest egg, according to this article on MarketWatch. For example, some people say they don't have money to save, but they can reduce their spending to free some money to set aside for the future. Others defer retirement saving because they are still young, but starting early gives their savings to grow through compounding for a longer time, which would mean ending up with a bigger nest egg by the time they retire.
Where to put your portfolio when you hit 50
Investors in their 50s will still have about 15 working years before retiring, so they may opt to adopt an aggressive approach to retirement investing for maximum returns, according to this article on personal finance website Motley Fool. They may use a more conservative strategy if they plan to retire early, as they cannot afford to lose substantially from a market downturn. Others who have saved enough for the golden years don't need to invest in riskier investments to maximize their return potential.
A crash course in personal finance for broke millennials
Financially strapped millennials are advised to start saving for retirement at an early age, according to this article on Forbes. Their retirement savings are likely to be $100,000 more by the time they retire if they start at age 25. Opening a Roth IRA and contributing even a small amount to the account can go a long way. 401(k) participants may also opt to contribute enough to get their employer's 401(k) match, which can help boost their account balance by the time they retire.
Fiduciary rule is a chance to get a better standard of care
Investors stand to gain from the federal fiduciary rule, according to this article from Kiplinger. The concept of fiduciary standard can be traced back to an 1830 court ruling that defined the "prudent person standard of care” clients could expect from a prudent person who acted as a fiduciary, writes the expert. Read the article for tips on how clients can use the rule to their advantage.
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access