KiyaJay asked:


Is there a good website with explanations on terms such as mutual fund, bonds, equities…that also explains how to get started? I need help understanding person finance and investments. Any useful advice appreciated.
Personal finance, I meant!

Safe Harbor 401K plans are a valuable investment for employees looking to invest the maximum amount of money into their retirement funds. It is especially beneficial for older workers who are concerned about having what they need when retirement rolls around, because these plans allow them to invest as much of their income as they want into retirement.

The rules and guidelines on how much of an employee’s income can be invested and how much an employer is required to match, can get confusing, but it is worth learning the ins and outs of the Safe Harbor 401K option for workers who want to boost their retirement savings as much as possible in a short period of time.

This type of 401K retirement fund allows workers to invest as much of their earned income as they want, even if they choose to put in 100%. There are caps on the total amount, but it is over $40,000 a year and is adjusted regularly. If you want to invest all of your income, you will need to check the current allowed amount at the time you start the account.

While all 401K plans allow employers to match contributions, this model requires them to match at least part of what the employee puts in. In general, the employer must match 100% of the first 3% of the employee’s contribution and half of the next 2% contributed. There is also the option to put in 3% of all contributions made by all employees.

If you are at all concerned that you may not have enough money to retire comfortably, then this could be a beneficial investment towards your future. This is especially true if you are getting rather close to the retirement age and need to boost your savings considerably in a short period of time. Essentially, you are being offered the chance to divert more of your immediate income to your retirement funds than would otherwise be possible through a standard 401K plan.

Whether you should invest your money in this manner really depends on how badly you need the retirement funds and if you can afford to give up a large percentage of your current income to make this investment.

You do not want to give up half of your income right now if it will put you in financial duress in the short term. Investing for the long term is very important, but it is also essential that you have what you need to survive right now. When determining how much of your income you can afford to give up, it is essential to list all of your current expenses.

If you two incomes coming into your household, you may be able to contribute a large portion of one of these to boost your retirement funds and still have stability from the other income. This is a great option if you are concerned about not being able to retire comfortably.

By: Jack T. Riley

About the Author:

If you’re young and just beginning your career, retirement planning may seem so far off that it’s the last thing on your mind. If you’re on the opposite side of the fence, with retirement approaching, you may be trying to figure out how to handle it. Regardless of your unique situation, it’s an absolute must that start preparing now. With the gas prices at new highs, recession fears, and Social Security instability, retirement planning is not what it used to be. As a result you must invest for your retirement, not necessarily save for it.

First of all, your place of employment may or may not offer some sort of retirement plan. Back in the day these were called pension plans and the were a solid part of the retirement planning process. As the economy turns into a more competitive global economy these older more reliable plans are becoming a thing of the past. As a replacement, you should be offered something by the name of a 401k plan.

401k plans are a powerful way to invest for retirement over time. They usually allow you to invest in a number of mutual funds and company stock. When making your investment selection it’s important to practice diversification. You should spread out your investments in different asset classes. And most importantly, let’s let the Enron debacle provide us with a good example of what not to do. You should never have all your retirement funds in your company stock. Never. No matter how solid you think your company is, things can go bad. And when they do go bad, you’ve not only lost your job, but your retirement too.

Now, if your employer does not offer a 401k plan, it’s more important then ever to take a proactive approach. You’ll want to set up an Individual Retirement Account, or IRA. An IRA is an excellent way to start your retirement planning process, especially when a 401k plan is not available to you. Traditional IRA’s allow you to deduct contributions, so you get the taxed deferred growth until retirement. Roth IRA’s work adversely, in that they are not deductible upon contribution, but are completely free of tax in retirement.

The most important step in retirement planning is the simplest one–getting started. The earlier you take action and start investing for your retirement the much larger your retirement. Time is a funny thing, starting early is more important than getting great returns or investing large amounts. Take the first step and just get started, no matter how small the investment.

If you’re company offers a 401k retirement plan it’s even more prudent to start early. Most companies offer a company match for your 401k plan contributions. This means that for every dollar you contribute, they’ll often match that dollar for dollar, up to a certain limit. So, at the very least you should utilize a 401k plan up to the company retirement plan match. This is easy money, as you’ll be receiving a 100 percent return on your money, right off the bat. Where are you going to get those returns? The answer, is not anywhere without a lot of risk. You can then add that 100 percent to any market returns you capture over time. And the beauty of it all is a $100 deduction out of your payroll will feel like less because it’s pre-tax. All these benefits really make starting a 401k plan a no-brainer.

When getting started with the 401(k) process, just get started. If you have access to a 401k retirement plan, take advantage of it. If you don’t it’s probably even more important to take advantage of an IRA. Secure your financial future today.

By: Frank Rodriguez

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eHow asked:

An elder law attorney is an individual that works with wills and trusts, taxes, probates and beneficiaries. Decide if hiring an elder law attorney is best for writing a will withtips and advice from an experienced financial adviser in this free video. Expert: Patrick Munro Contact: www.northstarnavigator.com Bio: Patrick Munro is a registered financial consultant (RFC) with outstanding sales volume of progressive financial products and solutions to the senior and boomer marketplace. Filmmaker: Reel Media LLC

Eugene D asked:


I will be eligible for Social Security retirement benefits on Sept. 19 of next year. Assuming my “paperwork” is in order, when will my first benefit payment be paid? Would it be in September, or pro-rated, or start in October?

Tauhric B asked:


Explain 401K benefits in a way that reached the audience, is easy tof them to understand and emphasize the advantages of a 401K. How can you explain this benefit during employee orientation so that it results in high participation, less confusion and fewer phone calls for clarification.

zaxxon asked:


What if, in the hypothetical case, I cashed my 401K, paid nothing to the IRS and ran away to a foreign country to never come back to the US?

Donna S asked:


I know I can use a loan from my 401k towards the down payment. If I have some money left over from the 401k after that, can I use the rest for the closing costs?

CBS asked:

The weak stock market is having a direct impact on the retirement accounts of millions of Americans. Financial adviser Ray Martin offers tips to protect your investments from recession.

1. Get Serious!

Start early. The sooner you start saving, the more time your money has to grow. Put time on your side. Make retirement savings a high priority. Devise a plan, stick to it, and set goals for yourself.

2. Avoid Being too Risky with Your Retirement Money

The most common types of risk related to retirement savings are:

a) Shortfall risk. Shortfall risk can occur either from not saving enough during your working years or from being too conservative with your investments. By investing too safely, you can run the risk of not having enough money when you retire.

b) The risk of losing principal. The risk of losing principal is often associated with volatility, or the price fluctuations within a specified period of time. Although volatility is inherent in the markets, time is on your side.

3. Plan for long-term needs

You need to plan for what is known as “non-market losses”, catastrophic things such as health care and long-term care.

According to the Health Insurance Association of America over 50% of Americans will need some form of long-term care, either at home (full or part-time), or outside the home at a managed care facility.

Medicare and private insurance will not pay for most long-term care. Weigh the cost of long-term care premiums against the cost of paying for care out of pocket.

4. Your Life Expectancy

Find the ages of all the people who died in a relevant period, add them together and divide by the number of people, and you have life expectancy. Make sure your needs will be covered even in case you live longer than you might expect based on the life expectancy tables and your own health factors. Most retirement planners are now using an age of 90 years of more.

5. Your Expenses in Retirement

Some expenses in retirement may be lower than now. Taxes should go down. Generally, loans and mortgages are paid up, so out-of-pocket housing costs may decrease. Work-related expenses are also likely to decrease, such as dues, transportation to work, work clothes, etc.

Some expenses will probably stay the same but may take up a larger share of your income. Utilities, food, gifts and contributions, and car and property insurance costs will stay fairly constant with incremental increases.

Other expenses will go up once you retire. Health care and health insurance expenses will likely increase. Costs for travel, leisure and entertainment are also likely to increase, since retirees have more leisure time.

6. Loaning Money to Your Friends and Family

Just say no! I have a friend that says her Financial Advisor won’t let her do it.

7. Overestimating How Much You Can Take Out

Setting an annual withdrawal rate is an important decision in retirement income planning. Be careful not to withdraw a percentage equal to your estimate of the return on your investments.

To provide an idea of how much might be withdrawn annually so that it would be likely to last 30 years or more, Standard & Poor’s looked back at the actual record for stocks, bonds, and inflation and analyzed all possible 30-year holding periods since 1926. It determined that the average sustainable withdrawal rate for a portfolio composed of 60% U.S. stocks and 40% long-term Treasury bonds was about 5.5% per year when adjusted for inflation.

8. Plan for the Effects of Taxes and Inflation

Inflation will cut into the value of your investments the way taxes cut into your investment return. Inflation has averaged about 3% a year over the past few decades. This may not sound like a lot, yet consider this: $100,000 today will only be worth about $74,400 after 10 years of 3% annual inflation.

Please consult a professional financial or tax advisor for advice that is specific to your circumstances.

9. Resist the Urge to Micromanage Your Retirement Accounts

According to David Foster, an accountant and certified financial planner from Cincinnati, two of the worst things to happen to retirement planning is 24 hour internet access to accounts and Daily Pricing,. Most retirees have worked hard all their lives and retirement is a time to enjoy the fruits of your labor. Micromanaging your retirement accounts just adds stress to your life for no reason.

Any of these 9 ideas may produce positive results for you however, when you use them together you have a better chance for success.

By: Phillip J. Kuhlenbeck

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