Why I Hate Target Date Mutual Funds and You Should, Too

target date mutual fundsYou’ve been investing in your 401k for quite some time and are probably still clueless in where your money is going.  (Don’t worry…you’re not alone)

But you’re thankful that they offer these “target date” or “life cycle” funds that make investing in your 401k so easy.

What are target date funds? You know… the funds where all you have to do is choose the year you plan on retiring and voila – you’re all set.

Winner, winner, chicken dinner…..how easy is that?

Here’s the BIG problem.  Target date funds, although easy, can sometimes eat away at your returns.

Or stated just a bit more bluntly– They suck!

*You know I hate Target Date Mutual Funds when I take the time to record a video.
[Read more…]

How to Reduce Your Tax Rate

Nobody likes paying taxes. Not that they don’t pay for some things we definitely need. Roads, some kinds of healthcare, representation in the government, and lots of other things America needs to keep itself running. They are a necessary evil in a civilized society.

But still – we all hate paying them. Anybody with me?  And if possible, I think everyone would like to pay less money into them. And I’m here to tell you that it’s possible to reduce your taxes with a couple different tactics. Some of them may mean the money you’d spend is contributed anyway, but others allow you to keep the money in different ways.
[Read more…]

Should You Invest in Roth IRA or Thrift Savings Plan?

Saving for retirement is one goal commonly shared by most individuals. Unless you are independently wealthy or inherit enough money to feel confident you will never have to rely on savings (I did not either one of these), you most likely want to put money aside during your working years to ensure your comfort and security when you retire. This can be done in any number of ways, as there are dozens of different “types” of retirement savings plans from which to choose. Each plan has its own benefits and drawbacks making it important to find the one that best meets your current and long term financial needs. Members of the military and federal employees have additional savings tools at their disposal, making the decision where to save even more complicated. Here we look at two popular savings plans available to service members, their families and United States Federal Government employees.
[Read more…]

QDRO and Your 401k or Pension Plan

Throughout my military career I’ve constantly been surrounded by acronyms.  The Army is notorious for them: APFT, MOPP, PMCS, AWOL.  These are just a handful of the thousands of them that exist.  Some I know.  Most I don’t.  I was constantly having to research what the heck most of them stood for.

While acronyms were expected in the military, I didn’t imagine how prevalent they would be in the financial services industry. One of the acronyms that I came across that I felt like I was in the military again was QDRO.  What makes it even more confusing is that I’ve heard it pronounced both “Quid-dro” and “Quad-dro”.  What’s the correct pronunciation?  The jury stills out on that one.
[Read more…]