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A lady’s handbag is her life’s catch-all. It completes her outfit – it’s fashionable and, for some, a necessity. And while she rocks the latest trend, it’s possible her stock portfolio is so yesterday.
When this savvy (and well-dressed) woman views her retirement savings as her handbag collection, market capitalization will become her favorite go-to.
Article written by Michelle Blake for Smart401K
A cool-looking website isn’t an effective website. An information-overload website isn’t an effective website.
A website that allows customers to quickly gain information is effective.
Don’t get me wrong – I probably appreciate art forms more than most. However, at times I wonder why some websites are more preoccupied with coolness than with easy-to-find info?
For example, say I’m making a fruit salad for the weekend’s BBQ and want to research exotic fruits. When I search for exotic fruits, I don’t think, “Wow, I need to find the most robust mini-movie display of a seedling turning into a tree…” I just need fruit. Fruit I’d like to learn more about. And, like most, I’m pressed for time.
Visitors are potential customers and they get distracted. And annoyed. Ever have to sit and wait while – 10%, 46%, 82% – a site actually loads? Please. By the time the scroll reaches 20% I’m already on a different site.
A graphic design colleague said it well, “A website is like an extended business card. It provides information.” And if that information is hidden, cluttered or written like a scientific equation, chances are your customer will bail.
Content organization and clear wording are keys for your website’s success. Snooze. Boring. If you’re thinking “boring,” think again.
Put yourself in your customer’s shoes. Then think about your website pet-peeves. Does seeing a loading bar make you nuts? Did you spend 5+minutes before finding your item?
When it comes right down to it (no offense intended here designers across the world):
Website coolness is a conversation piece.
A sale is a sale.
Don’t let your business pull a potato head and fall flat.
This just in…
Rep. Michele Bachmann (R-Minn.) is from Iowa.
Reaches out to Lady Gaga Monsters as she announces 2012 Presidential campaign, “I, too, was born this way.”
Featured Guest: Carolyn Humpherson, Smart401k Financial Communications Specialist
Recessions and market drops are scary. It can feel like you’re watching your money take a roller coaster ride.
People who lose money in a decline often experience tremendous regret, which stands to reason because losing money is an emotional event.
And then regret becomes fear.
So what’s the problem with fear? Fear is healthy, right?
While fear is healthy and helpful in many parts of life, it can lead investors to take action based on emotion rather than thoughtful analysis. Fearful investors often reallocate investments so their portfolios become much more conservative. Some people even duck out of the market in a panic. It’s a perfectly natural reaction because, as humans, we’re programed to cut our losses and become defensive when we’re afraid. However, the very thing that saved our ancestors’ lives – instinct – could be battering our portfolios.
The problem is this: retreating in the face of a market drop leads you to sell low. When you’ve bought investments that were performing well, then you sell them during a market decline, you’re buying high and selling low. That’s not wise.
Don’t kid yourself: Making drastic portfolio changes in reaction to market changes is the same as trying to time the market. And attempts to time the market just aren’t advisable for retirement investors because market timing is very risky.
What can you do?
Tame your fear because you probably won’t conquer it. Remember that investing requires thoughtful analysis and that gut reactions aren’t often correct. Long-term historical performance of the market has been positive and retirement investing is a long-term endeavor.
What practical steps can you take to protect you from yourself?
1) Focus on dollar cost averaging – continue to invest regularly during ups and downs. Dollar cost averaging has historically allowed investors to take advantage of market cycles with a long-term approach and helped to grow accounts without timing the market.
2) Determine your tolerance for risk. Remember that risk tolerance should reflect your personality – not market conditions. We would advise against getting aggressive during a healthy bull market if you had a tough time stomaching losses during a weaker bear market.
3) Determine your investing time line. How long will it be until you need to access your retirement savings? Will you need it all at once or will you draw a monthly income? Do you need to see continued gains even after you’ve started drawing an income?
4) Most importantly, create a long-term investing plan. Having a plan makes it easier to avoid making decisions based on emotions.
If you have questions about taming your fear and creating a long-term investing plan, feel free to contact our adviser team at 877.627.8401.
About Smart401k
Smart401k is a web-based investment advisory service providing unbiased recommendations to help people invest in employer-sponsored retirement plans. Smart401k provides service to nearly 11,000 clients who collectively have more than $2 billion in assets. Plan participants receive personalized, fund-specific investment recommendations and the support of professional investment advisers available to discuss all investment questions. Based in Overland Park, KS, Smart401k is online at www.smart401k.com and on the blogosphere at blog.smart401k.com.
I remember my early life…
Running back from class, forgoing a slice
Some bumble-farm-town station
An hour with “Oaps” across the nation
I really wanted to wear Oprah’s clothes
I’m her cool friend, this she knows
Then got a new work schedule now to make
Interrupt my “Oaps’” hour? Are you baked?
Will just sign up for something else
And now that I’m grown
I’m now realizing…
You’ve put up with such crap, oh Oprah
How you’ve dealt with our sh*t is amazing
And yet you’ve never billed us hourly, oh Oprah
25 years of therapy, Hollywood and girl-gabbing
How we’ve taken you for granted, oh Oprah
Up until a few years ago
We hadn’t met, then I sat in 3rd row
I brought my Mom in for her birthday
Thought we’d see you & Dr Oz
Turns out the show was another cause
WTF, it’s on women & depression?!
Thank God for the Howie Mandel retake, oh Oprah
25 years of therapy, Hollywood and girl-gabbing
And this is my thanks from you, oh Oprah
I’ve been bitter and yes, even boycotted
Fighting with the DVR –
A year without knowing how you are, oh Oprah
Just thinking through this scheduling miscall,
Mad at my friend, I couldn’t bare it all
I came back this last season and you should know
You’ll be missed-it’s about time we let you go
I really look up to you…oh Oprah.
Ladies, whether you’re single, married or a Mother, knowing the basics for investing is crucial. And for those of us gals ready for spring shoes, asset allocation will become your favorite accessory.
What Is Asset Allocation?
Asset Allocation is one of the most important phrases you can know for your financial future. It’s a term used to describe how and where your portfolio is invested. It gives your portfolio Zen. It brings peace to your investment strategy. How? When you invest in several fund types or “classes” (cash, bonds, fixed-income, stock, etc.), your portfolio achieves balance. If one fund has an off quarter (zero gains), another might’ve done well (higher gains). Aum…balance. The key is investing in more than one class.
Shoes!
Better yet, if you think of your portfolio as your spring wardrobe, asset allocation resembles your shoe collection. Asset allocation works to help you answer questions such as: Do I have too many brown shoes, not enough, enough Italian, reliable wear-and-tear?
How often have you thought, “These shoes aren’t right with this outfit.” Or how many times have you worn the same pair as last time because you only have one pair, only to realize the buckle broke. Asset allocation is like your year-round stylist. It organizes your shoes (funds or investment options) into categories, balancing your financial wardrobe between casual kicks and black-tie heels. It develops this year’s look with variety. And provides back-up options in case of malfunctions.
Lucky for you, assembling a stylish nest egg is easier than sifting through the 24-hour sale:
Usually, it takes 30 years for a Series EEE bond to mature. Similarly, a money market fund favors cash rather than corporate investments because (A) it wants to take its time to (B) produce minimal returns. This class is durable and focuses on:
– Stability
– Long-term Maturity
– Minimal Growth
How? No matter how the stock holdings (companies) perform, the bonds’ stability protects the fund from major gains/losses. For those of you wanting to invest in the stock market without completely endangering your retirement savings, you can. You won’t see extreme gains or lose your shoebox, yet historically, they’ve outperformed money market funds. This class is considered semi-risky and focuses on:
– Caution
– Shielding Market Volatility
– Medium-paced Growth
Why invest in stock? As a shareholder, you invest based on the chance for opportunity. If the stock market/company do well, you could significantly earn. On the flip-side, if the company’s product or the market dips, you could face significant losses. Keep in mind; you’ll need to reverse your high-heel mentality when considering each stock fund’s risk factor: while stocks funds are the stilettos in the stock market, historically, the smaller the company, the higher the risk. This class is considered risky and focuses on:
– High Performance
– Potential For Profits
– High-yielding Growth
When The Shoe Fits, Invest
After you grasp the classes in your savings menu, it’s time to build this year’s look. Achieving your own asset allocation pizzazz means you’re:
Asset allocation is really all about the shoes. Maybe your flip-flops are worn out or you had to go traditional when, in fact, you envisioned strappy? Why settle for only one class?
Ladies, interested in expanding your collection? Visit erollover.com’s Morningstar tool and start shopping.
Article written by Michelle Blake for erollover.com
Article written by Michelle Blake for erollover.com
Yes! A new job. During transition, we’re so focused on wrapping up our projects that we forget about our employee benefits. Namely our 401k plan.
It’s easy to overlook your 401k plan. Contributing to a 401k plan usually means money is invested before you receive your paycheck. It’s your invisible benefit. You know deposits happen because you see deductions listed on your payroll stub. And if you don’t pay attention, your statement is your reminder.
So what happens to your 401k balance when you leave the company? You have options and work to do before your first day.
Know Before You Go
Contact Your Benefits Administrator
Your Balance – Your Options
Is This You?
Know Before You Go
Your retirement money is your most important project to pack up before leaving. Maybe it’s been years since your orientation or “you know you have it somewhere” but just can’t find your benefits binder. Whatever your situation/scenario, use this 401k checklist while preparing for your next professional adventure.
□ Contact Your Benefits Administrator – Normally, your “no longer actively employed” status is sent to your 401k plan administrator via payroll feeds once you leave the company. Your updated status will flip your payroll and 401k contributions switch from on to off. However, there are areas you can get a head start on as you gear-up for your farewell.
Before giving notice, spend time talking with your benefits group so your 401k balance is ready for the move:
(a) Outstanding 401k Loans – If you’ve taken a loan from your 401k plan, most plans need you to pay your balance off before leaving the company. If you don’t, you could go into “default.” Ick. Defaulting means either any outstanding amount will be deducted from your balance or get taxed. Ask about your options ahead of time. Chances are the repayment process will need to start before your last day.
(b) Opening An IRA – If you don’t already have an IRA, talk with your financial planner. Everyone’s situation is different: maybe your new company doesn’t offer a 401k plan or if it does, it’s possible opening a Roth or Traditional IRA is your best route. If you decide to roll over your 401k balance, you’ll have to provide details, i.e. IRA account number, financial institution name, etc. Ask what pieces of information you’ll need ahead of time.
Don’t have a financial planner? Visit erollover.com to find an advisor you’d like to work with.
(c) Balance Verification – Relocating for your new gig? You may need to show proof of your portfolio’s balance for mortgage approvals or other financing. Ask your plan administrator how they handle these requests and what the turn-around time looks like.
(d) Updating Your Information – Speaking of relocating, make sure to update your address, contact number, email address, etc. You’ll avoid any possibility of account information getting lost in the mail.
□ Your Balance – Your Options
Cash Payment – When leaving the company, you can take your balance as a payment to yourself.
ALERT! If you take a payout, you’re taxed heavily. You’ll automatically have a 20% withholding from your balance. Then, you may face tax penalties when you file taxes for the year you’ve received payment. At minimum, this is a 10% penalty.
The reality is, no matter where you’re employed and how much you’ve saved, the cash payment’s jingle goes something like: “There’s no cha-ching without some tax sting.” Do the math to see how much you’ll potentially lose when the check is made in your name.
Rolling Balance Into Another Qualified 401k Plan or IRA – You’ll have the option to roll your balance over into your new employer’s 401k plan or your IRA.
Rolling over any balance means (1) avoiding tax penalties and (2) keeping your retirement savings intact. Make sure to ask your 401k administrator about their process and timing.
More than likely, you’ll have “x” number of days to decide. You’ll need to complete forms, including new account numbers and plan specifics, so it’s critical to complete all steps before your deadline. Some plans automatically send a cash payment, with those dreaded withholdings/tax penalties, if the process isn’t finalized by the due date.
Stay In The Plan – You may be eligible to keep your balance invested in the company’s 401k plan.
Why do ex-employees keep their money in the plan?
While leaving the company means you won’t be making payroll contributions, it’s possible you can still transfer your balances from “x” to “y” funds or keep your portfolio as is. Not to worry, your investments will gain/lose as they stay on the stock market’s roller coaster ride. Plus, you’ll continue receiving account statements for as long as you stay invested.
Many compare their current investment options to their new employer’s menu. If you like how you’re portfolio performs, or if some funds aren’t offered in your new employer’s plan, you may consider to stay put.
And, you can roll over your balance at any time. You’ll still have to follow your benefit administrator’s process, so again, know your deadlines and follow the process.
Is This You?
□ “I’m Being Forced Out – Why Can’t I Stay?” – Some plans have an automatic force-out policy if the balance is under $x000.00. If you’re “forced out” your payment is treated the same as if you took a cash payment. After seeing the tax reality of taking the money and running, ask if you’re eligible to roll over your balance to another 401k plan or IRA.
□ “I’m Close To Retirement – Now What?” – Ahhh…the moment you’ve been working for is arriving. Contact your plan’s administrator and ask about your retirement options: Can you keep your money invested? Do you have to take it out? And what are the tax consequences? Also talk with your financial advisor before making any retirement moves – do you have enough saved to live on?
□ “Doh! I Took A Cash Payment & Changed My Mind” – Well, you can change your mind, but you can’t change your tax situation or get your withheld amount back once you’ve received the check. When the check is cut, the check is cut. However, once you have the check in hand, ask your financial advisor if you can use it for opening an IRA. Since it has already been taxed, you may avoid further tax penalties down-the-road.
□ “I Lost My Pin Number” – Just because you’re leaving the company doesn’t mean you won’t need to access your account. You may have questions, you may still be working through steps with your administrator and you won’t get anywhere without your pin number. Keep all access codes in a safe place. And if you need to request new ones, ask how long it will take to process. If you have a few days left until your deadline, and getting a new pin takes over a week, then what?
As you consider new employment, develop a solid exit plan for yourself and your retirement savings. Using this checklist will help you prepare for takeoff. Happy travels.
Article written by Michelle Blake for erollover.com
Baseball fans rejoice: For the first time in ages, Major League Baseball starts its season early.
Without question, baseball season openers mark the beginning of hot dogs, apple pie and a lengthy season of wins/loses. And it’s starting early – game on! Truth is, as the World Series declares its winner, we’re one year closer to our retirement. Ever consider starting to save early? Or evaluating your portfolio’s roster?
Mark Your Calendar
From baseball diehards to novices, this time of year marks an annual transformation – we’re temporarily taken over by team rosters, statistics and trivia:
Why not earmark March as “review my portfolio” month?
When your savings review season gets booked, you’ll step up to the plate and tweak the year’s budget. Saving will become as clear as a line drive – you won’t ignore or forget about it, and if you do, you’ll have a survival plan. No one can expect to have winning retirement seasons without taking action.
Fact #1: If you know more about your home team’s batting average than you do about your savings’ portfolio it’s time to review your investment roster.
Know Your Investment Personality
Attending the season opener is one thing. Yet baseball fans everywhere know it’s really about the seats. Box seats? General seating? Bleachers? Your seats lay the foundation for your attendance bragging rights. Your favorite seating area can also indicate your investment personality:
If you can’t make the game, take erollover’s quick personality quiz to (1) determine your risk tolerance and (2) gain portfolio model suggestions:
Fact #2: Your comfort zone with your investments will help determine how your portfolio should be invested.
Check Your Funds’ Stats
Checking your mutual fund’s averages is easier than reading the game’s program. Visit the erollover mutual fund center, powered by Morningstar, to:
I saw ratings and performance charts that would put my city’s team to shame.
Fact #3: You’ll score with solid data. Make trades or shake up your investment line-up as you/your financial advisor see best.
Weather Delays
As we all know, the stock market has good/bad days. And, similar to your team’s pitching squad/the weather, there’s no way to predict greatness. So…as you/your financial advisor scrutinize your portfolio, question, question and question again. Why?
You’re investing for the long-haul. Even if your statements show promising gains you’ll still need to be equipped for losing streaks. They’ll happen and your gains might get delayed. Sample questions on your list may include:
Ask away – all questions are fair-game. They’ll add to your “dealing with the stock market’s volatility” game plan.
Fact #4: “There’s always next year” doesn’t apply to saving for your retirement.
Baseball season & your retirement savings – knowing the facts will help you win.
Article written by Michelle Blake for erollover.com
Every year I look forward to March. Why? <insert drum roll>… It’s Final Four Time: The NCAA Tournament brackets. The upsets. The get-togethers. So why is it that I always plan ahead for March’s hoopla yet saving for retirement never gets booked?
March’s Madness
If your tourney tip-off starts like mine, you:
It’s as if collegiate sport unites me with fellow sports fans all over the world. Note to self <insert thought cloud here>… It’s Final Four time across the globe. I don’t need a login, password or friend list for this camaraderie. I need a new TV. And a comfy chair. Let the shopping begin!
Shopping Spree Justifications
This year I decided to Big Dance-it-up right. I got an early start and set out to price the best chair and TV I could find. I even impressed myself with validating why I needed excessive hoops-staples:
Personal Savings Foul
<insert referee whistle>…Foul! If this jackpot strategy was in a player’s handbook, a one-second savings rule would get called.
My hand is up, this call is justified. Why? It took me one second to see that my spending justifications are also my retirement dreams. I want to live comfortably. I’d like to travel. I hope to still have funds set aside. Suddenly I’m starting to see a different version of Cinderella’s crown.
Shopper’s Remorse Rebound Plan
Ever think about spend:work ratios? I visited daystopay.com as my first shopper’s remorse recovery step. I plugged in my salary and $4,000 splurge and…voila!…I immediately saw a countdown timer showing me the days, hours, minutes and seconds I’d have to work to pay off my Final Four’s chair/TV. Aye chiwawa. Seeing is shocking.
Not wanting to forfeit my financial future’s game, I’m now developing a savings strategy that’s more concrete than my brackets rituals. Up until now, my savings plan has had quality bench time. It all boils down to this: I want to do more in my retirement than sit/wave a white towel.
Danny Koefe, special-education teacher and author of, “How To Survive (And Perhaps Thrive!) On A Teacher’s Salary,” provides perspective when questioning spending habits, “Many tell me they just don’t have anything left over each month to save. During the conversation I ask how much they spend on their cell phone each month. Many need the platinum plan and that’s perfectly fine. If not, why pay for what you don’t need?”
Staying In The No Regrets Zone
USA Today reported on the worries and regrets Baby Boomers have. According to this Boomer Project, 50-60 year olds wish they’d (1) saved more (2) planned better and (3) developed a plan for their later years.
Yikes! Talk about an instant replay/do over. The buzz surrounding some of our parents’ reality makes me see I’ve been taking practice shots for my financial future. Sure I’ve made some attempts at saving. I’ve also sprinted toward reasons to spend.
I’ll still look forward to March each year. Except now, I’m strengthening my retirement’s offense so I don’t fall into the regret zone. I don’t want to be a statistic in some future wantedit-boughtit-shouldasavedit report.
Retirement goals + solid savings strategy =s slam dunk.
Article written by Michelle Blake for erollover.com
Tax season. Everyone knows the drill: Work. File taxes. Repeat.
Seems easy, yet “tax season” stirs negativity. It causes unnecessary dread. For some, gearing up for April 15th resembles scheduling an annual tooth extraction.
Why?
Your W2 forms can give you an annual raise.
When you play your tax filing cards right, you’ve developed a strategy for (1) living a comfy life today and (2) boosting your future’s savings. This is good. And as the professional world knows: good behavior = rewards.
‘Show me the money’ you say? Check this: when your tax attack yields a refund and you save/invest that money, your money earns interest (more money). Congrats, you’ve just given yourself a raise by planning/earning interest on your tax return. If you end up owing (sigh!), you/your accountant can review and change direction. These new steps can very well deliver the goods next year.
Those fearing tax season have an imaginary plan-of-attack. They freak over filing, when realistically they’ve done nothing proactive to prepare. This is bad. Bad behavior =s zero raise. However, anyone can rid their tax-funk. The key is knowing how to begin the process.
Pay yourself! Here are 5 suggestions for surviving 2010 tax season:
Surviving tax season is simple when you plan, save, review, and then plan again. These steps will help you pay yourself and get a grip whenever the “t” word is mentioned – your sanity and financial future will thank you.
| Sally | Sam | |||
| Annual Income | $30,000 | $30,000.00 | ||
| Annual 401k Contributions | $2,000.00 | $0.00 | ||
| Annual Taxable Income | $28,000.00 | $30,000.00 | ||
