Blog Archives

How to Evaluate Index Annuities?

10/31/2017

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Q. How to evaluate index annuities?

A. Below is a list of questions you should ask when evaluating index annuities:

What is the guaranteed minimum interest rate?
What charges, if any, are deducted from purchase payments?
What charges, if any, are deducted from the contract value?
What is the death benefit?
How long is the term? What options are available at the end of the term?
What is the participation rate? For how long is it guaranteed? Is there a minimum?
Does the contract apply rate caps to determine the amount of interest credited? What is the company's history of rate cap renewal?
What rate crediting strategy or indexing method is used to determine the amount of index credited?
What index is used as the performance benchmark?
Is there a margin, spread, or administrative fee? Is that in addition to or instead of participation rate?
What surrender charges or penalties apply to full surrender or periodic contract withdrawals?
Does the contract have vesting provisions? What are the terms that apply?
Are there surrender or withdrawal charges waived for confinement to a nursing home or other reasons?
What annuity income payment options are available?

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How to Evaluate Fixed Annuity Products?

10/30/2017

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Q. How do I evaluate fixed annuities?

A. You should get answers to the following questions first, then make decisions -

What are the interest guarantees and for how long do they apply? Are there any bonus provisions?
What charges, if any, are deducted from the purchase payments?
What charges, if any, are deducted from the contract value on an ongoing basis?
What is the guaranteed minimum interest rate?
Can the annuity lose value without surrender?
What are the penalties for early withdrawal and how long do surrender charges or negative adjustments apply?
Is there a free withdrawal provision? If so, what are the terms?
What is the death benefit?
What is the earliest maturity or annuitization date?
What payout options are available at the end of the annuity term?
What is the AM Best rating of the company?

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What Are The Differences Between Fixed Annuity and CD?

10/29/2017

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Q. Which is better: fixed annuity or CD?

A. It depends on your specific purpose. We will compare fixed annuity and CD in the following features -

1. Financial Backing
CDs are issued by banks and have FDIC protection. Fixed annuities are issued by insurers and we typically use AM Best rating to evaluate insurers. Fixed annuities are also protected by State Guarantee Funds which typically have $300,000 protection for annuities (although they vary by state).

2. Interest Rates
Fixed annuities typically have higher interest rates than CDs.

3. Taxation
Fixed annuities provide tax-free growth feature. CDs' earnings are taxable each year.

4. Early Withdrawals
CDs typically do not allow early withdrawals without penalty. Fixed annuity products typically allow a certain percentage of contributions for early withdrawals. However, if the withdrawal is before age 59.5, the earning is subject to 10% IRS penalty.

5. Income Option
CD has no income option, and fixed annuity could provide a life time income guarantee.

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How to Plan for Retirement Health Care Costs

10/28/2017

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Q. How to plan for retirement health care costs?

A. Fidelity Investments estimates that the average 65-year old couple retiring now will need about $260,000 to pay out-of-pocket health care costs, including deductibles and Medicare premiums, over the rest of their lives. And this doesn't even include long term care costs.

There are a few options to use to plan for health care costs in retirement time -

1. Use HSA
An HSA offers triple tax advantages, to maximize HSA's benefits, contribute as much as you can to the account and pay current medical bills out of pocket, in this way, the money in HSA will have time to grow.

2. A Hybrid Life Insurance
A hybrid policy combines life insurance and long term care benefits. It's basically a permanent life insurance policy that allows you to spend down the death benefit to pay for long term care should you need it. If you don't need long term care, the money will be paid to your heirs when you die.

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How to Use Permanent Life Wisely in Retirement Time?

10/27/2017

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Q. How do I use my permanent life policies in my retirement time?

A. A permanent life policy has two key components - death benefit (which will be paid to your beneficiaries when you die) and cash value (which is portion of the premium you paid to the policy and the growth of it).

You can withdraw your cost basis - the amount in the cash value account you have paid in premium - tax-free. This should serve as a cushion at the time when stock market crashes and you need money for retirement expenses. You can also borrow against your policy and you can have two payback options - with interest and without interest. Finally, if your policy pays dividends, you can generate income without giving up the death benefit by taking the dividends distribution.

How to convert a life insurance to annuity?

If you need a regular source of income, you can convert your life insurance into an income annuity through a 1035 exchange. The downside to this strategy is that you will give up the death benefit, but you will lock in income for the rest of life. The conversion is tax-free, but you will pay taxes on a portion of each annuity payout, based on the proportion of your basis to your gains.

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How to Manage Pension Wisely?

10/26/2017

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Q. How can I maximize my pension benefits?

A. If your employer offers pension, at the time of your retirement, your first decision is whether to take a lump sum or as a lifetime payout.

Because pension payment is based on year of service and salary, and gender is not a factor, it is generally a good idea for women to take lifetime income because women tend to live longer than men.

When to take a lump sum?

If you have other assets, such as a sizable investment portfolio, and if you are comfortable managing your own money, you will have more flexibility when you take the lump sum option.

When to take lifetime income?

If you want guarantee against market downturns, and not to worry about outliving your money, then taking lifetime income option will be better than taking the lump sum and use it to purchase an annuity from an insurer.

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How to Minimize Taxes By Taking Money From Different Accounts?

10/25/2017

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Q. I have money in individual brokerage accounts, 401K accounts, and Roth IRA account. Which order should I take money out of these accounts in order to minimize my taxes?

A. Here is the conventional wisdom when it comes to taking money out of the various investment accounts - start with your taxable accounts first, particularly if your income is low as you start your retirement and become qualifying for tax-free capital gains.

Next, you can take withdrawals from your tax-deferred accounts, followed by your tax-free Roth IRA accounts so you can take advantage of the tax-deferred and tax-free growth.

Exceptions to the Conventional Wisdom

If you have a large balance in 401K or Traditional IRA, your RMDs could push you to higher tax bracket, to avoid this, consider taking withdrawals from your tax-deferred accounts before age 70.5, but be careful in this strategy and not to push you into higher tax brackets in these years.

You can also consider converting some of the 401k or traditional IRA money to Roth IRA, but again you need to pay attention to the amount of the conversion so not get pushed into higher tax brackets.

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How to Use 401K Money to Purchase Annuity

10/24/2017

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Q. I do not have a pension, can I use 401k savings to create my own personal pension?

A. Yes, you could. There is a new type of deferred income annuity - a Qualified Longevity Annuity Contract (QLAC), it offers a tax benefit for retirees who have a lot of money in tax-deferred retirement accounts.

With QLAC, you can invest up to 25% of your traditional IRA or 401(k) plan (or $125,000, whichever is less) in a QLAC without raking required minimum distribution on that money when you turn age 70.5. To qualify for this special tax treatment, your payment must begin no later than age 85.

How does QLAC reduce tax bill?

New York life did a study - assume a 70-year old in the 28% tax bracket with $500,000 in an IRA would pay $117,000 in taxes on RMDs between age 70 and 85, assuming 5% annual net return. If the retiree put 25% of the IRA balance into a QLAC at age 70, he would pay roughly $87,000 in taxes over the same period. Taxes will increase once the annuity payment starts at age 85.

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How to Freeze Credit at 4 Credit Bureaus?

10/23/2017

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Q. I found I was impacted by the Equifax data breach, what should I do?

A. First, anyone could check out at the Equifax site to see if impacted by the Equifax data breach or not.

If unfortunately you are impacted, the best action is to freeze your credit at all of the 4 credit bureaus (4 large ones, 1 small one) -

You might also consider putting a freeze on at the consumer agency ChexSystems - this is the bureau that financial institutions use to verify that you have a good history of managing bank or credit-union accounts.

Why credit freeze? It's regulated at the state level, while credit lock is enforced by each credit bureau only.

Why not signing up for TrustID? It's a credit monitoring service, which means it only notifies you after something bad already happened.

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Is Social Security Benefit An Inflation Fighter?

10/22/2017

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Q. Is social security benefit a good inflation fighter?

A. The answer is yes, because it has an automatic cost of living adjustment (COLA) feature. The COLA is only 0.3% for 2017, but could be 2.2% in 2018, in 1981, COLA was 14.3%!

If possible, try to postpone taking social security benefits as late as possible, because if you take social security at age 62, the benefit will be reduced by as much as 30% compared with delaying it until full retirement age 67. For every year you wait to take social security benefits until age 70, you will get guaranteed 8% return, plus future COLA will be based on that bigger benefit.

Best way for couples to take social security benefits

A married couple could maximize social security benefits by letting the higher earner delay taking social security until age 70, in this way, no matter who dies first, the survivor gets the largest possible benefits.

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How to Ensure Your Investment Keep Up With Inflation?

10/21/2017

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Q. How to make sure my investment keeps up with the rate of inflation?

A. Inflation rate has been low in recent years, but historically inflation rate averages more than 2%, and compound that with time, it could significantly erode an investor, especially a person who is close to retirement's returns.

Generally there are two ways to ensure your nest egg keeps up with inflation -

1. Invest in Stocks
Over the long time, stocks are the best hedge against inflation, see this chart. Therefore, even for retirees, it's a good idea to keep exposure to stock markets, for example, keep 60% of exposure to stocks when entering into retirement phase.

2. Purchase TIPS
TIPS stands for Treasury Inflation Protected Securities. They are bonds issued by the Treasury Department with the following features: principal will be adjusted for inflation, and you are guaranteed a fixed rate of interest every six months, so as the principal rises, the amount of interest you earn will increase as well.

How to purchase TIPS?

You can buy TIPS directly from the Federal government if you set up a Treasury Direct account, in this way, you don't have to pay a commission to buy them, and you will avoid a management fee that comes with a TIPS fund. Plus, if you invest in TIPS directly, you will never get less than your original investment when the bonds reach maturity.

How to minimize risks of TIPS?

TIPS have risks too, how to minimize its risks? Please see discussion at this blog post.

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How Do I Know If I Need Additional Disability Insurance Coverage?

10/20/2017

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Q. How do I know if I need additional disability insurance coverage?

A. During benefits enrollment at work, you have the opportunity to sign up for health insurance and other perks like a 401(k) or tuition reimbursement. Many employers also offer disability insurance as an add-on benefit.

Often, this type of insurance is paid for by your employer or offered at a reduced rate. While it seems like a good way to protect yourself, you need to understand how disability insurance works and how much coverage you’ll have through your employer’s program.

Is your salary covered?
Make sure you understand how much of your salary will be covered if you’re out of work due to a disability. The typical coverage is a percentage of your salary, and you have to make sure that you can live on that while you’re getting hospital care or recovering at home. Taxes are also an issue. Depending on your policy, your benefits may be taxed, which will reduce your income while you are disabled.

You should also understand the definition of “disability” according to your policy. Coverage may vary from company to company, and it could also be different depending on your job. You should also ask about partial benefits if you are able to work part time rather than full time as you recover.

How long are you covered?
Other things to look for include how long you need to wait before your benefits begin, and how long benefits and payments will last. Ideally, you should have a policy that will cover you until your normal retirement age up until you can claim your Social Security benefits.

Disability is something that most of us don’t think about until it happens to us. If you determined that you need additional disability insurance coverage, we are an independent agent and could help you out. Please feel free to contact us to run a quote.

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Why A Hybrid Insurance That Combines Life Insurance with LTC Always Works For You?

10/19/2017

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Q. Why hybrid insurance is better than individual permanent life insurance the long term care insurance?

A. A hybrid insurance product combines the features of permanent life insurance with long term care insurance, its benefits and premiums are guaranteed. The insurance company either:

pays you if you need Long Term Care (LTC)
pays your heirs if you do not need LTC
pays you and your heirs if you need a modest amount of LTC
pays you a refund if you cancel the policy.

Below we will use Nationwide YourLife CareMatters Combination Life and Long Term Care Insurance product as an example to illustrate its features:

Overview. Nationwide Life and Annuity Insurance Company is part of Nationwide Mutual Insurance Company, an A.M. Best A+ rated, 92-year-old company. The Nationwide YourLife CareMatters policy is a Combination Life and Long Term Care Insurance (also called hybrid or asset based) policy. With Traditional LTC policies, premiums can be increased and you may not receive any benefits if you do not need LTC. With Combination LTC policies the benefits and premiums are guaranteed. The insurance company either pays: 1) you if you need LTC, 2) your heirs if you do not need LTC, 3) you and your heirs if you need a modest amount of LTC or 4) pays you a refund if you cancel the policy.

Nationwide YourLife CareMatters is Unique Because it is a Cash Indemnity Policy. There are three benefit payment methods among LTC policies. Reimbursement policies, the most common type of policies, require you to submit documentation of all expenses for reimbursement up to your monthly LTC benefits. Traditional Indemnity policies pay up to your monthly LTC benefits if you show even $1 worth of LTC expenses, or documentation of informal care. Cash Indemnity policies pay your monthly LTC benefits regardless of your actual LTC expenses, without needing to submit monthly bills or receipts.

Nationwide YourLife CareMatters is Unique Because It Pays for Formal and Informal Care from Family and Friends. Most LTC polices prohibit informal care, particularly if the care is provided by a family member. The Nationwide YourLife CareMatters policy allows you to use formal care providers (home care agencies or facilities) and informal care providers, including family and friends. Since informal care can be much less costly, you can obtain significantly more care with a lower monthly benefit. This is very valuable for home care.

Nationwide YourLife CareMatters Policy Options. The policy options include: Benefit periods of 2-7 years; Inflation protection of none, 3% simple, and 5% compound; Elimination period of 90 days; Cash indemnity based benefit payment method of the full monthly benefit, regardless of actual LTC expenses; Residual life insurance benefit (even if you deplete of your LTC benefits) equal to 20% of the face amount of insurance and a Return of premium vesting schedule 85% year 1, 88% year 2, 92% year 3, 94% year 4, 97% year 5, 100% year 6.

How Nationwide YourLife CareMatters Compares with Other Combination Life and LTC Policies. Let’s look at a husband and wife, Bill and Sue, who are each 55 years old and reside in New Jersey. They each pay a $100,000 one-time premium and are expected to need LTC in 25 years at the age of 80. They are comparing Combination policies that offer the largest LTC benefits, with six years of LTC and inflation protection included in the premium. They prefer Indemnity policies (highlighted in blue below).

Action Steps and Conclusions. Nationwide YourLife CareMatters provides high monthly and total LTC benefits, with the flexibility of formal and informal care providers. Since premiums vary greatly based on age, health and marital status, request individualized quotes.

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How to Generate Income During Retirement Time?

10/18/2017

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Q. What are the ways to generate consistent income during retirement time when I delay my social security benefits?

A. For retirees who delay their social security and other sources of guaranteed income, it is very important to have other sources of income, the following could be the major sources:

1. Blue-chip Stocks that Pay Dividends
You can invest directly in companies with a track record of paying increasing dividends, they can serve as a hedge against inflation as well. But be careful of companies with high yields, such as 8% of higher, as they might not be sustainable.

2. ETFs or Mutual Funds Invest in Dividend-paying Stocks
If you want to have a diversified portfolio of stocks that pay dividends, you can consider ETFs and Mutual funds that invest in companies that pay dividends. Some good ones include: T Rowe Price Dividend Growth (PRDGX), Vanguard Equity Income (VEIPX), Schwab US Dividend Equity (SCHD) and Vanguard High Dividend Yield (VYM).

3. Bonds
If you are a conservative investment, you should maintain 40% or more exposure to bonds. If you are in high tax bracket, make municipal bonds your core holding because the yields on munis issued by states and local governments tend to be lower than those of the bonds, but you won't owe federal taxes on the income.

4. REITs
REITS own and manage properties such as offices, apartments, and shopping malls, they must distribute at least 90% of their taxable income to shareholders. Also, REITs are a hedge against inflation.

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How to Minimize Risks of TIPS Investment?

10/17/2017

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Q. I want to invest in TIPS as a hedge to inflation, how do I minimize my risks doing so?

A. Treasury Inflation Protected Securities (TIPS) is a good inflation hedging tool, however, it is not a perfect inflation fighting tool because it is vulnerable to rising interest rates - when rates rise, bond prices fall.

One way to minimize the risks is to choose a short-term TIPS fund with less interest-rate sensitivity, such as Vanguard Short Term Inflation Protected Securities (VTIP), it is an exchange-traded fund and has one of the lowest fees - only 0.07%.

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Retirement Income Calculator

10/16/2017

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Q. What's the best way to check if my savings combined with social security will provide enough income for my retirement?

A. The best way to make sure you have sufficient income from your savings and social security benefits is to perform regular check ups, using some free online tools, such as the T. Rowe Price's Retirement Income Calculator.

In the tool, you will plug in the amount you already saved, the percentage of salary you are contributing, and the age at which you plan to retire. The calculator will tell you the possibility you will be able to retire on that schedule with enough income to support your lifestyle.

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Manage Retirement Funds Withdrawals

10/15/2017

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What does managing retirement funds withdrawals mean?

It means to develop a plan to withdraw funds from your retirement savings to ensure your money could outlive your life.

How to manage retirement funds withdrawals?

There are several ways, the money common way is the 4% withdrawal rate, and use inflation rate as the guide for adjustment. However, the 4% rate assumes you will live 30 years, so you will need to adjust it based on your actual age. Also, we have discussed several other better ways than this traditional rule of thumb here and here.

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Why and How to Put Retirement Savings Into Different Buckets

10/14/2017

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Why it's important to put money into different buckets?

You don't know when a bear market might hit your retirement fund, it could be at the worst time, because of this, it's important to divide your retirement fund into 3 buckets: now, soon, and later.

How to put money into different buckets?

The "Now" bucket holds money you will need in the short term and should be held in savings account. It along with your social security benefits and pension should cover your basic living needs for up to a year. It should also have enough cash for unexpected or expected major expenses.

The 'Soon" bucket will be your source of income for the next 10 years. It's better to invest in a fixed annuity or high quality short term bonds. As the Now bucket fund is depleted, you withdraw money from the annuity or sell some of the fixed income investments to replenish it.

The "Later" bucket holds money invested in more aggressive stock funds and won't be needed for a decade. This bucket can also include life insurance or a deferred-income annuity, which pays income later in life. Sell funds from this bucket to replenish funds in the "Soon" bucket about 5 years before it runs out of money. If the market is in a downturn, you can wait a few years for such replacement.

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12 Strategies to Ensure Retirement Savings Last As Long As You Do

10/13/2017

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Q. What can I do to make sure I don't outlive my retirement savings?

A. This is the biggest concern for most people - retiree or not. I highly recommend the 12 strategies summarized by the Kiplinger magazine in one of its recent issues' cover story. They are practical and cover all the issues you need to consider. Below is my interpretation of these 12 strategies.

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How to Value Top Tech Companies

10/12/2017

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Q. How to evaluate the big technology companies and assess their valuations are fair or overpriced?

A. Aswath Damodaran from NYU's Stern Business School is one of the top scholars study company valuations. Below is a good YouTube interview where Aswath shows you how to valuate the top tech companies -

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Should I Purchase Additional Disability Insurance?

10/11/2017

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Q. I have disability insurance from my employer. Should I purchase additional disability insurance on my own?

A. Many people think they don't need to buy additional disability insurance because they already have coverage provided by their employers.

In order to decide whether you should buy disability insurance on your own, you should ask the following questions then decide your next step:

How much of your wages or salary will the policy replace?
Your policy should replace 60% of your current income. That’s more than it appears to be, because disability benefits are tax free. However, if your employer pays for your coverage, any disability benefits you receive will be taxable, meaning you’ll end up with just 40% of your current pay. Could you live on that?

How is “disability” defined?
You want a policy that says you are disabled if you cannot perform the main (or material or substantial) duties of your occupation — as opposed to any occupation.

Are partial or residual benefits available?
While you’re rehabilitating or recovering from your disability, you may experience a period when you’re able to work part time. Some policies require you to be unable to work at all; part-time employment would void your right to benefits. Therefore, you want a policy that pays partial disability benefits. It is good to have a policy that pays “residual” benefits, which are payable for the entire time you are eligible to receive disability benefits, beginning when your post-disability earnings are at least 20% less than your prior income.

How long must you wait before benefits begin?
The longer you must wait, the bigger your financial loss — but the cheaper the policy. Make sure you can afford to wait for the benefits to begin.

Are your benefits reduced if you receive Social Security Disability income?
It’s difficult to qualify for Social Security Disability benefits, but some policies reduce benefits by the amount you receive from Social Security. Ideally, you want a policy where benefits are not reduced due to income you receive from other sources.

Will your benefits increase after you are disabled?
They should, so that your disability payments keep up with increases in the cost of living.

How long will your policy pay benefits?
It’s possible you will be disabled for life. That means you want a policy that will pay benefits until your normal retirement age (at which point Social Security benefits begin). Fortunately, white-collar/professional workers generally can get such coverage, but policies for blue-collar workers are generally limited to paying benefits for five years.

If you believe you need additional disability insurance, we can help, please contact us today.

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10 Common 529 Plan Related Questions and Answers

10/10/2017

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1. Who can establish a 529 plan and how many plans can be established?
You can establish and name anyone as a beneficiary — a relative, a friend or even yourself. There are no income restrictions on you, as the contributor, or the beneficiary. There is also no limit on the number of plans you can establish.
2. How much can you contribute to a 529 plan?
The annual contribution limit for 2017 is $14,000. This limit is per contributor, per beneficiary. For example, a married couple could contribute $28,000 each year to each of their children’s 529 plans. If the couple utilizes the accelerated gift method, they could contribute $140,000 to each of children’s 529 plans and then repeat the process after five years.
3. How frequently can you change investments inside a 529 plan?
You can make changes twice a year. An often-overlooked solution to this limit is available when you change the beneficiary. Upon changing the beneficiary, you reset the investment change limit.
4. Are there taxes on 529 plan withdrawals?
No. Withdrawals of principal (contributions), interest, dividends and capital gains are all tax free is used for higher education. Be sure to match withdrawals with payments of qualifying higher education expenses in the same tax year.
5. What are qualified higher education expenses?
The most common qualified education expenses include: required tuition and fees, room and board, off campus housing (up to the school’s room and board allowance for federal financial aid), required textbooks and computers.
6. What happens if the student does not pursue higher education?
If the student does not pursue a higher education, the 529 can be left intact and continue to grow on a tax free basis for a different student. Change the name of the student before taking withdrawals by changing the beneficiary on the 529 plan
7. When changing the beneficiary, what type of beneficiaries would be classified as a tax free transfer?
The most common tax free transfer beneficiaries are: son, daughter, descendant of son or daughter, stepson or stepdaughter, brother sister, father, mother, stepfather or stepmother, son or daughter of brother or sister, brother or sister of father or mother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, spouse of any individuals described above, spouse or first cousin.
8. What if the 529 account owner dies before the 529 balance has been withdrawn? You can and should name a successor to your 529 account. In doing so, you can create a multi-generational account exempt from capital gains taxes, income taxes and estate taxes. Since the successor will own the account and can change the beneficiary, choose wisely.
9. What happens if the student receives a scholarship?
The 529 can be left intact and continue to grow on a tax free basis for future higher education expenses (e.g.: business school, law school or medical school) for the same student or for a different student (by changing the beneficiary). You can take withdrawals up to the amount of a scholarship and avoid the 10% penalty on a nonqualified higher education expenses. Note, while you will still pay income taxes on the earnings portion of those withdrawals, your contribution portion (principal) is tax free.

10. What happens if I withdrawal the money from the 529 and do not use it for higher education expenses?
With very few exceptions (i.e.: the beneficiary becoming incapacitated, attending a U.S. Military Academy or receiving a scholarship), non-qualified withdrawals are subject to income taxes and a 10% penalty. Note, income taxes and penalties apply to the earnings portion of those withdrawals. Your contribution portion (principal) is still tax free.

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When Not to Follow These 8 Financial Rules of Thumb

10/9/2017

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Rule of thumb: shop early to get the best deal.

When not to follow it: you can save by waiting to buy seasonal goods at the end of the season.

Rule of thumb: buy in bulk to save

When not to follow: when it comes to perishable foods, shelf-stable items such as cooking oils, or non-food items that will lose effectiveness after a long time, it's okay to buy more frequently.

Rule of thumb: don't spend more than half of take home pay on living expenses.

When not to follow it: it is a good practice to spend 50% your take home pay on necessities (housing, transportation, food, etc.), 30% on life style (Cable, telecom, gym, dining out, etc.), and 20% for retirement. But as life events happen, it's okay to adjust your spending pattern otherwise.

Rule of thumb: pay off high interest debt first

When not to follow it: when the high interest debt has a huge balance, it is a more psychological win to pay off debts with smaller balances. Also, if you could save the money to get company 401(k) match, wait to use it to pay off the debt.

Rule of thumb: buying a home is better than renting

When not to follow it: if you want to stay mobile for professional or personal reasons.

Rule of thumb: buy if you plan to stay more than 5 years

When not to follow it: if you live in cities where home prices compare more favorably with renting or appreciate considerably, the five years threshold could be a lot shorter.

Rule of thumb: only buy stocks you are familiar with

When not to follow it: a good product doesn't mean a good investment, more research is still needed even you like a company's products.

Rule of thumb: dollar cost averaging is the best way to invest

When not to follow it: if you are investing for the long term, invest a lump sum all at once is better than dollar cost averaging investing, because stocks perform better than cash over the long term.

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5 Mistakes Investors Make With ETFs

10/8/2017

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5 Mistakes Investors Make with ETFs - from Fidelity:

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What Are the Typical Returns For Various Investment Products?

10/7/2017

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Q. What are the typical annual returns for various investment products?

A. Below is a list of various investment products and their typical annual returns, ranked from low to high -

Municipal Bonds: 1% - 5%
Investment-grade Bonds: 2% - 4%
High-yield Bonds and Bank Loans: 3% - 5%
Foreign Bonds: 3% - 6%
Real estate investment Trusts: 4% - 6%
Master Limited Partnerships: 6% - 8%
Closed-end Funds: 7% - 9%
Mortgage REITs: 8% - 11%

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<<Previous

How to Evaluate Index Annuities?

How to Evaluate Fixed Annuity Products?

What Are The Differences Between Fixed Annuity and CD?

How to Plan for Retirement Health Care Costs

How to Use Permanent Life Wisely in Retirement Time?

How to Manage Pension Wisely?

How to Minimize Taxes By Taking Money From Different Accounts?

How to Use 401K Money to Purchase Annuity

How to Freeze Credit at 4 Credit Bureaus?

Is Social Security Benefit An Inflation Fighter?

How to Ensure Your Investment Keep Up With Inflation?

How Do I Know If I Need Additional Disability Insurance Coverage?

Why A Hybrid Insurance That Combines Life Insurance with LTC Always Works For You?

How to Generate Income During Retirement Time?

How to Minimize Risks of TIPS Investment?

Retirement Income Calculator

Manage Retirement Funds Withdrawals

Why and How to Put Retirement Savings Into Different Buckets

12 Strategies to Ensure Retirement Savings Last As Long As You Do

How to Value Top Tech Companies

Should I Purchase Additional Disability Insurance?

10 Common 529 Plan Related Questions and Answers

When Not to Follow These 8 Financial Rules of Thumb

5 Mistakes Investors Make With ETFs

What Are the Typical Returns For Various Investment Products?

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