401ks

How can you make your 401k work better for you?

  • 401ks

    Chocolate-Covered Hand Grenades

    What is something worth? It’s worth as much as another man or woman is willing to pay for it. When I talk about investing in “chocolate covered hand grenades,” I’m not literally talking about hand grenades or chocolates. I’m describing what happens when people invest in bubbles. Bubbles in the market are created by supply and demand. As the demand increases and the supply decreases, the cost rises. This is the bubble growing. But, when the demand disappears the bubble bursts and the cost drops suddenly. More than likely, it plummets. Why, when a burst is coming, do people keep investing? Chocolate covered hand grenades! The idea, the story, the…

  • 401ks,  Return on Investment

    A Better Approach to Financial Planning

    I said it last week. I’m going to say it again. Do not lower your expectations as an investor. Did the Great Recession leave you wary? Most likely. As you evaluate your portfolio and establish your goals, you should consider on what your portfolio is based. Many financial advisors build their client financial plans using software that forecasts that stock market returns vary according to the normal distribution (that so called “bell curve”). As a mathematician, if it was true that market returns followed this curve, it would be an easy format to use. Typically, distribution curves are predictable. Unfortunately, stock market returns are not nicely grouped in a bell shaped curve.…

  • 401ks,  Return on Investment

    401(k) Developments

    It’s my pleasure to introduce Rowena Lei, the newest member of the Adams Financial Concepts family. As a recent graduate from the University of Washington, Rowena majored in History. Monday was her first official day in the office. She’s a bright, talented young woman and I’m very excited to have her on board. Over the next few months, she will play a crucial role as we continue to develop our 401(K) program. Why is this important? I have talked often about 401(K)s. Frequently On The Money we’ve explored the historical development of 401(K) plans, their pros and cons, and the upcoming changes such as transparency of fees. In the next few…

  • 401ks,  Return on Investment

    401(k) Changes

    Change. Do you find it scary? A lot of people do. In the financial industry, big businesses have been fighting change. They haven’t been successful. Change has come. The Department of Labor instituted a new rule for 401(k)s starting in November 2011. Personally, I think it’s necessary. The new rule for 401(k) plans states all fees must be spelled out for participants. This means third party administrators, those who prepare the reports, will break down each fee and disperse the information among participants. Why is this huge? Seventy percent of 401(k) participants don’t think they pay anything for their 401(k). They believe the plan is paid for by their employer.…

  • 401ks,  Return on Investment

    401(k) – How’s Your Retirement Looking?

    How much you put into your 401(k) and how your plan performs can determine how you enjoy your golden years. Will you live comfortably or will you need to sell peanuts at the baseball game? Recently 401(k)s have come under incredible scrutiny. The Department of Labor, who oversees 401(k)s, says 77-percent of 401(k)s are non-compliant with current regulations. Non-compliance includes failure to properly communicate the plan to employees, provide investment diversification or an investment policy statement, and more. What is a 401(k)? 401(k)s give employees the ability to save for retirement tax deferred. They can start withdrawing as early as 59½, but typically depositors don’t tap their 401(k) until they…

  • 401ks,  Return on Investment

    401(k) Facts and Stats

    I’ve spent a lot of time talking about 401(k)s in the last few months. We’ve covered the challenges, upcoming changes, historical development, and potential criminal liability. Still, I know it can be a lot to take in. Here are a few quick facts and stats to help you keep things straight. 401(K) Retirement Expectations The average 401(k) plan balance of current retirees is $144,000. This means they receive an average of $400 – $500 a month. Hidden Fees The Department of Labor (DOL) estimates 401(k) plan participants incur up to 17 hidden fees for things like marketing, legal, accounting, investments, and insurance. Fiduciaries or not? Business owners who are plan…

  • 401ks,  Return on Investment

    Ten Is the New Four

    It used to be saving 4% of your income over the 40 working years to retirement (22 to 62) would be enough to get you to 80% of your annual salary. Now financial advisors and financial firms are recommending 10%! The reason? Using current financial planning software, modern portfolio theory and asset allocation mathematically reduce returns. Our goal at Adams Financial Concepts LLC is to get you to your goals using our own approach which we feel will give you superior returns. One of my son’s high school teachers during parent orientation to the school asked this question: If you wanted to buy a $40 item and were offered a choice…

  • 401ks,  Return on Investment

    The Equation Has Changed Part 2

    Last week I posed a question – why is 10% the new 4%? Why do you need to put 10% of your income away in whatever account is preparing you for retirement, when just a few years ago, 4% was considered a safe nest egg? Let’s look at the math (my favorite subject, and I assume yours); math is communitive. Let’s elaborate with an example: if you get a 10% discount on a $10 item, do you want it before or after tax? A 10% discount on $10 is $9. With 10% tax, your item would be $9.90. A 10% tax on $10 brings it up to $11. Then you…

  • 401ks,  Return on Investment

    The Equation Has Changed Part 1

    Do you read the newspaper or listen to CDs? When was the last time your heard the dialup tone? Do you know what a dialup tone is? In just the last 20 years, we have experienced exponential change in everything from how we decide what to have for dinner to how we learn the news. The goal of this blog, and of my radio show, About Money, is to put you ahead of the curve so that you can make investing and financial decisions that not only keep up with changes, but outpace them. I want to spend a couple weeks talking about the changes we’ve seen in the financial…