Home Resource Center Retirement Strategy

Market Timing and Chasing Returns

Market timing is a strategy wherein an investor buys and/or sells an investment based on predictions about future market events or values. Trying to time the market by jumping from fund to fund with your retirement account is very risky. Instead, we recommend that retirement investors adopt a long-term investing approach that focuses on steady investing … Continued

Rebalancing Investing Strategy

Rebalancing is an investing strategy to keep your investments in line with your original intentions as the markets move up and down. To rebalance your account, you buy and sell your assets every so often to keep the same weighting (percentage) in the funds as you originally requested. Rebalancing is best explained using an example. … Continued

401k Distribution Options

Distribution is the word the IRS and the financial industry use to talk about withdrawing money from an employer-sponsored retirement plan or any other tax-deferred retirement plan, like an IRA. Generally, tax-deferred employer-sponsored plans like 401(k), 403(b), 457 and Thrift Savings Plan are governed by similar IRS regulations. The specifics mentioned below apply to 401(k) plans but generally … Continued

Retirement Plan Loans

Taking a loan through a work retirement plan means you’re borrowing a portion of the money in your account and paying yourself back. Retirement plans offered through work, including 401(k) plans, are not legally required to offer loans – with the exception of the federal government’s Thrift Savings Plan that legally must offer loans under specific … Continued

401(k) Hardship Withdrawals

A hardship withdrawal is a distribution from a 401(k) plan to be “made on account of an immediate and heavy financial need of the employee, and the amount must be necessary to satisfy the financial need,” according to the IRS. Retirement plans are not required to offer hardship withdrawals. Among plans that permit them, some employers … Continued

Social Security Taxes

When planning for retirement, think about all of the different sources from which you will draw income: your employer-sponsored plan, your IRA, an after-tax savings account, a pension and, of course, Social Security. The Social Security program is a pay-as-you-go system. The money you pay in today is paid out to retirees who currently are receiving … Continued

Life Expectancy

There is a bizarre relationship between life expectancy and financial planning: we all want to live longer, but living longer requires more money. Medical professionals can generalize about how long you might live. There are predictors like genetics, family history, illness and fitness. But no one can really pinpoint your life expectancy. Because of this … Continued

Calculating Your Replacement Ratio

When most people think about retirement planning, they think “how much do I need to save?” A commonly forgotten element is “what income will I need during retirement?” One of the key components in calculating your retirement income outlook is estimating your wage replacement ratio: what percentage of your pre-retirement income is needed to fund your retirement … Continued

Active and Passive Investing

Passive investing is often used interchangeably with index investing. In this context, passive investing is the practice of following an index, like the S&P 500. The goal of passive investing is to create a portfolio that contains the same funds as an index. Because indices are created to show an overall picture of the market or … Continued

Risk Assessment

The word risk features prominently in financial discussions and literature. Some people have mental associations that cause a negative reaction to the term, but within the financial industry risk is not undesirable. Risk is the chance to lose part or all of an investment in exchange for the chance to earn gains. Generally, a greater risk of … Continued