IRA Contribution Limits For 2013 and 2014, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of: $5,500 ($6,500 if you’re age 50 or older), or your taxable compensation for the year The IRA contribution limit does not apply to rollover contributions or qualified reservist repayments. IRA Deduction Limits Your traditional IRA contributions may be […]
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Setting Retirement Goals
Setting a monetary goal for retirement is not just about how big your nest egg can be. The goal should focus on the size of your expenses in relation to your nest egg. A retiree, let’s call him Henry, can have $2 million set aside, but if he is spending $140,000 a year, his money […]
What is the 4% Rule?
“The 4% rule” (aka the Trinity Study) is a common guideline financial planners and do-it-yourself investors use to project how much they need to save by the time they retire. The theory behind the 4% rule is simple, but not flawless. If retirees can expect to earn 6% on a safely allocated retirement account, 2% […]
What Are We Teaching Our Kids?
I was waiting in line recently and overheard three parents talking. The first one said, “My kids think money grows on trees”. The second one replied, “I know, they think I’m an ATM. They don’t get it.” Oddly, the third one said, “My horse thinks I’m made of money”. I doubt I can help the […]
What is Compound Interest?
Compound interest is interest that adds onto the principal and the previous interest earned. Simple interest only accrues on the principal and not previous interest payments. Compound interest grows much faster than simple interest because it is earned (or paid) on a rising balance. The more frequent the interest is compounded, the quicker the balance grows. When […]
Protecting Your Account with a Trailing Stop Ladder
Investors have multiple choices on how they can protect their accounts from major losses in a bear market. One of my favorites and most often used methods is a Trailing Stop Ladder. A trailing stop allows an investor to place a limit order that moves higher as the stock (or ETF) moves higher. The order […]
Should you participate in a 401(k) plan that doesn’t match?
Yes! Anyone who is not in dire straights with their finances should invest in their 401(k), even if their company does not match a single penny. The tax savings makes investing in a company’s 401(k) a smart investment decision for almost everyone. Not only do savers get to put money in their qualified retirement account […]
