Financial Planning
How I Was Stung By A Tax Scam And How You Can Avoid One
When I was stung by a tax scam last year, someone stole my or my wife’s Social Security number and filed a false return
But the thief wasn’t too smart and a huge refund check came my way, which I returned to the IRS.
Yeah, I sent a generous government rebate right back to the Treasury. It wasn’t a legal refund, so I let the IRS know immediately that I was the victim of fraud.
The Mistakes That Individual Investors Make
Individual investors get lower returns than they should. According to a recent study by Jason Hsu of Research Affiliates and coauthors, even though the compound return on the S&P 500 was 8.97% per year from 1991-2013, the average stock mutual fund investor earned only 6.87%, a full 210 basis points per year lower. Other studies have found similar results, and the same pattern has been shown for investors in bond mutual funds. The return shortfall earned by the average investor is due to predictable mistakes that can be avoided.
Breaking Up (the Pension) Is Hard to Do
In a divorce, splitting up the pension is trickier than dividing the house.
Divorcing couples and their advisers “who aren’t hip to divorce splitting of retirement plan assets often do it improperly,” said Howard Phillips, a Delray Beach, Florida, actuary and author of “Dividing Retirement Plan Assets in a Divorce.” He knows, because he values pensions for couples negotiating their divorce settlements and then drafts the order that will be entered into the court.
3 Ways to Help Aging Parents With Their Finances
Concrete steps for streamlining your parents’ day-to-day financial management, tuning up their portfolio plan, and covering key estate considerations.
The Pros And Cons Of Seller Financing
Cutting out the middleman typically represents progress. Can you imagine depending on a telephone operator to put your call through? (Come to think of it, going through an operator might save us from making those calls we really shouldn’t make.)
But back to the point: Who wants to deal with a third party when you don’t have to?
Total-return investing and asset location can offer results
The prospective client, a recently retired dentist, had sold off all his stocks and put his life savings into long-term bonds, high-yield (‘junk’) bonds, mortgage REITs, and similar securities in an attempt to generate sufficient income to live on, said Cordaro, a financial advisor with RegentAtlantic Capital, an RIA firm in Morristown, New Jersey, that manages $3.2 billion in assets.
Wealthy Kids 8 Times More Likely To Graduate College Than Poor
A new study from the Pell Institute shows that family income not only has a huge correlation with the chance that a kid gets into college, but of that person’s likelihood of actually graduating. (Hat tip to CNN Money.)
Should You Save More For Retirement Or Pay Off Your Mortgage Early?
One of the most common questions we get is whether to put savings toward paying off a mortgage vs. investing more for retirement. This question is tricky because the answer can vary depending on which stage of life you’re in. Are you in the accumulation phase of trying to build wealth or in the distribution phase of using that wealth to generate income?
What Is The Alternative To An Annuity?
A reader asked:
A salesman wants to sell me an immediate fixed annuity which will start paying me $1,300 for the rest of my life.
I’m turning 66 years old in April and that sounds nice, but I’ve always thought that annuities are not the best option. It will cost $260,000 and pay $15,600 each year. Is that a good deal? Isn’t that a 6% guaranteed return each year? If not, how should I think about it?
Why Using Home Equity to Invest in the Stock Market is a Bad Idea
“Strong stock market encourages the resurrection of a bad practice – borrowing money against the value of your home to play the market. The horror story set out below is likely to be repeated if these practices continue.
