by David C Lewis, RFA

Most people today are looking for 401k help. That’s because one of the most popular (if not the most popular) retirement plan is a 401(k) plan. Another popular plan is the Roth IRA. Of course there are more options than this, but these are the two most common.

Think about what you are trying to do when making a choice between various Government plans. Usually, you are attempting to save up enough money so that you can live comfortably in your old age. However, if you plan on saving enough for retirement, then a 401k will likely have you paying back more in taxes than you saved. Even an employer match may not help.

Focus on one of the “facts” you are constantly told about these plans. You are told that you’ll be in a lower tax bracket. Do you think that …

Make sure you get paid. The massive bull market of 1982-1999 changed the investment landscape dramatically, making growth investors out of everyone new to investing. Thanks to discount brokerages like E*trade and Ameritrade, investing was more accessible than ever before. Throw in the creation of 401(k)s and other investment focused retirement plans and you’ve got a genuine investing boom. Between 1983 and 1999, the percentage of US households involved in the market jumped from 19% to 49%. Amidst all the hubbub, dividends and income plays became unfashionable. With stock prices soaring to new highs almost every day in the late ‘90s, investors wanted growth, not boring payouts. And we all know how well this philosophy performed during the Tech Crash. One of the most quoted statistics regarding the stock market is the view that stocks have returned average annual gains of 10% since 1926. Far ...

It’s become a cornerstone of prevailing wisdom; be sure to roll the money in your employer-sponsored retirement plan into an IRA when you separate from your employer. This smart move can help preserve tax benefits and avoid tax penalties, plus make it easier to keep track of your retirement assets. Perhaps this is why most IRA assets come from lump-sum rollovers rather than annual contributions.

But an IRA rollover is just the beginning. An IRA is not really an investment in itself, but rather a special type of account that can be invested in thousands of ways. When you roll money into an IRA, the custodian will typically put it into a default investment fund until you specify otherwise.

Considering that mutual funds manage the largest share of IRA assets, here’s a roundup of some mutual fund options:

Stock funds typically pursue investment gains by trading stocks issued by domestic and/or international companies.

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by Daniel Beckett
An Individual Retirement Account, or IRA, is a retirement plan that provides tax advantages for retirement savings within United States tax law. Unlike 401k plans, which must be provided by an employer, IRAs can also be created by an individual. Aside from one specific type, IRAs contributions are made before tax.

Types of Individual Retirement Accounts

Different types of IRAs work in different ways. Traditional IRAs have no real distinguishing characteristics. Roth IRAs are perhaps the most different in intent, as the funds are taxed before contribution, allowing tax free withdrawals later in life.

SEP IRAs are generally offered by small businesses or self-employed indivuals. SIMPLE IRAs are more similar to 401(k) plans than other IRAs, though they have lower contribution limits and simplified administration. Self-Directed IRAs allow the holder to manage the fund themselves, rather than appointing a manager.

Though there were once …