Articles on Wealth Management Topics

More than 70% of workers with the option to invest in 401(k) plans either don’t participate in them or don’t fully understand them. Here are some simple tips for getting the most out of your 401(k) plan:

529 plan accounts are frequently used as tax-efficient and cost-effective vehicles for these education funding purposes. But some parents and grandparents remain reluctant to use them, or to contribute to them as much as they could, out of fear that these accounts may become overfunded.

I urge you to embrace bear markets as opportunities, as recurring market phenomena that can't be effectively avoided. This is the bright side of bear markets:

Large tax-advantaged account balances have now been caught up in the political tug of war that is the debate over the Build Back Better Act.

2019's SECURE Act contains two provisions that make converting IRAs and retirement plan accounts to Roths more attractive:

Since March, COVID stories have dominated the headlines, and unprecedented financial market volatility has grabbed the attention of investors. As a result, it's been easy to forget that one of the most far-reaching pieces of legislation to affect the financial planning landscape in more than a decade was passed just before the pandemic struck. The SECURE Act, or Setting Every Community Up for Retirement Enhancement Act, contains provisions that impact saving for retirement, estate planning, retirement distribution strategies, tax planning, debt management, and retirement plan administration.

Buyers often seem unaware of the shortcomings of annuities until well after their purchase. Equity-indexed annuities are no exception to this statement. While the downside protection they offer is not at issue here (but is subject to the claims-paying ability of the insurance company involved), the upside potential of these products is often vastly exaggerated (or misunderstood) by salespeople motivated by nothing more than the prospect of sales commissions averaging about 6% of the amount invested.

In the last installment of Articles on Wealth Management Topics, we discussed academic research on different ways to estimate the magnitude of future stock market returns. As a refresher, the worst of the ways studied was to extrapolate future returns from past returns. Nearly as ineffective is to base estimates of future returns on surveys of individual and institutional investors.

Roth 401(k) contributions are especially advantageous to younger workers still looking forward to their peak earning years. And for higher-paid employees, Roth 401(k)'s may be the only way for them to contribute to Roth-style accounts. Now here's a way - courtesy of some fairly recent clarification from the IRS - to potentially supercharge the pace of your contributions to Roth-style accounts at the workplace, regardless of whether or not your employer offers a Roth 401(k) feature.

Target-date mutual funds have been attracting more and more assets during the last decade, primarily as a result of their burgeoning use in 401k and 403b plans. Plan sponsors and participants alike are drawn to the simplicity of TDF's, but as is often the case, the easy solution is not the best one. The weaknesses of target-date funds stem from three words: lack of customization.