investments

A “distribution” occurs when you withdraw funds from your 401(k) account. You can transfer these funds to another 401(k) or an Individual Retirement Account (IRA). Or you may use them to finance your retirement or some other life goal.

New 401(k) Rules for the New Normal

An important part of tax planning when it comes to investing is considering the tax impact of accessing your investment funds. As you know, one of the key features of the traditional 401(k) retirement account is that you can contribute pre-tax dollars from your income, which then grow tax free until you need them.

A municipal bond is essentially an IOU from a local government. You agree to lend that municipality money for a certain period of time, and they agree to pay you back with interest.

You may know about Roth IRAs, but did you know that many employers now give retirement plan participants a Roth 401(k) option? Both traditional and Roth 401(k)s offer significant tax benefits for investors, but those benefits differ in ways that are important for you to understand.

Traditional Values

Risk tolerance is a term you may have heard about when determining your investment strategy. While you might picture activities such as rock climbing or jumping out of an airplane when you think of risk, it has a different meaning when it comes to investing.

You just started a new job and have come across information about your company’s 401(k) in your benefits paperwork. You may be wondering what exactly it is and whether you should sign up. The 401(k) plan got its name from the portion of the IRS tax code that governs its use. In the past, most employees received guaranteed monthly retirement income through an employer-funded pension plan.

Many people mistakenly assume that the time for owning stocks is over once they hit retirement. But such blanket statements are not true for everyone. There are a variety of factors that should affect how much of your portfolio, if any, should be devoted to equities during your golden years. Here are some factors to keep in mind:

One often-cited guideline for determining asset allocation when planning for retirement is that you should subtract your age from 100 to find the percentage of your investment portfolio that you should keep in stocks. For example, it suggests if you're 40, you should keep 60% of your portfolio in stocks.

We’d all love to reap the rewards of high returns on our investments without risk. But unfortunately, wishing does not make it so. Like it or not, risk is part of the equation if you’re aiming for anything other than preservation of capital — a risky goal in and of itself, since the buying power of your money will slowly erode over time if you don’t outpace inflation.

With the proliferation of investment and personal finance websites, investors have access to a boundless number resources and tools once only available to financial professionals.