Most teenagers probably aren't thinking about saving for retirement, buying a home, or even paying for college when they start their first jobs. Yet a first job can present an ideal opportunity to explain how a Roth IRA can become a valuable savings tool in the pursuit of future goals. Rules of the Roth Minors can contribute to a Roth IRA as long as they have earned income and a parent (or other adult) opens a custodial account in the child's name. Contributions to a Roth IRA are made on an … [Read more...]
Inflation Protection for Investment Dollars
For the 12-month period ending in May 2022, the Consumer Price Index for All Urban Consumers (CPI-U) — the most widely used measure of inflation — increased 8.6%, the fastest pace in 40 years.1 The rate may trend downward as the Federal Reserve raises interest rates and supply-chain issues improve. But inflation is likely to be relatively high for some time. High inflation not only hits consumers in the pocketbook for current spending, it also has a negative impact on the future … [Read more...]
A Wealth of Information: How to Read a Mutual Fund Prospectus
With more than 7,400 mutual funds to consider in the United States alone, some investors may feel overwhelmed by the thought of deciding which ones to select for their portfolios. At the same time, most mutual fund-owning households base their purchase decisions on these measures: historical performance (94%), investment objectives and risk potential (91%), and fees and expenses (90%).1 Fortunately, reading a mutual fund prospectus is a key way to learn important details about your investment … [Read more...]
What’s Your Retirement Dream Elevator Pitch?
Imagine stepping into an elevator and realizing that you're about to spend the 30-second ride with someone who could make your retirement dreams come true — if only you could explain them before the doors open again. How would you summarize your financial situation, outlook, aspirations, and plans if you had 30 seconds to make an "elevator pitch" about achieving one of your most important goals? Answering that question — and formulating your own unique retirement dream elevator pitch — could … [Read more...]
ETFs Are Gaining on Mutual Funds: Here’s Why
Investor demand for exchange-traded funds (ETFs) has increased over the last decade due to some attractive features that set them apart from mutual funds. In December 2021, almost $7.2 trillion was invested in more than 2,500 ETFs. This is equivalent to 27% of the assets invested in mutual funds, up from just 9% in 2011.1 Fund Meets Stock Like a mutual fund, an ETF is a portfolio of securities assembled by an investment company. Mutual fund shares are typically purchased from and sold back to … [Read more...]
Foreign Tourists
More than 79 million foreign tourists visited the United States in 2019, adding $254 billion to the U.S. economy. Residents of Canada and Mexico accounted for almost half of the total, while the countries below were the top 10 sources of overseas visitors. Travel restrictions and lockdowns due to COVID-19 have severely disrupted the flow of foreign tourists in 2020. It's too early to know the full extent of the damage to the tourism sector, but the effects may continue for some time after the … [Read more...]
2019 IRA Contribution Deadline Has Been Extended
“Making a last-minute contribution to an IRA may help you reduce your 2019 tax bill. If you qualify, your traditional IRA contribution may be tax deductible. And if you had low to moderate income and meet eligibility requirements, you may also be able to claim the Savers Credit for 2019 based on your contributions to a traditional or Roth IRA. Claiming this nonrefundable tax credit may help you reduce your tax bill and give you an incentive to save for retirement. For more information, … [Read more...]
Spring Cleaning Your Way to Better Finances
Spring is a good time to clean out the cobwebs, and not just in your home or apartment. Your personal finances can benefit from a good spring cleaning, too. Here are some questions to ask yourself regarding your budget, debt, and taxes. Is there room in my budget to save more? A budget is the centerpiece of any good personal financial plan. After tallying your monthly income and expenses, you hopefully have money left over to save. But... is there room to save even more? Review your budget … [Read more...]
Think Twice Before Speculating on a COVID-19 Cure
“Headline-induced price swings suggest that investors are making investment decisions driven by hopes and fears, and possibly based on limited information.” As hundreds of companies race to develop vaccines and drug therapies that could help end the COVID-19 pandemic, news reports on successful or failed trials affect individual stock prices and can trigger swings in the broader market.1 Understandably, this highly contagious virus — and its severe economic repercussions — has a knack for … [Read more...]
Mid-Year Is a Good Time to Fine-Tune Your Finances
The first part of 2020 was rocky, but there should be better days ahead. Taking a close look at your finances may give you the foundation you need to begin moving forward. Mid-year is an ideal time to do so, because the planning opportunities are potentially greater than if you waited until the end of the year. Renew Your Resolutions At the beginning of the year, you may have vowed to change your financial situation, perhaps by saving more, spending less, or reducing your debt. Are these … [Read more...]
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