Monday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: NerdWallet’s best credit card tips for December. Also in the news: How to tell if a Roth 401(k) is for you, why postdating checks is a waste of time, and how many credit cards you should have.

NerdWallet’s Best Credit Card Tips for December 2016
Just in time for holiday spending.

How to Tell If a Roth 401(k) Is for You
Choosing the right retirement savings.

Postdating Checks Is a Waste of Time — Here’s Why
Not worth the risk.

How many credit cards should you have?
What’s the magic number?

Q&A: What to consider when investing in target date retirement funds

Dear Liz: I have 100% of my 401(k) in a fund called “Target Retirement 2030.” This fund is made of several other funds, so does that qualify as “diversified”?

Answer: It does. Target date funds have become increasingly popular in 401(k) plans because they do the heavy lifting for investors. The funds select asset allocations and grow more conservative in their mix as the retirement date approaches.

Target date funds aren’t perfect, of course. Some are too expensive. The typical target date fund charges about 1%, but Vanguard and Fidelity charge as little as 0.15%.

Another issue is the “glide path” — how quickly the funds get more conservative. There’s no consensus about what the right glide path should be, and investment companies offer a lot of different mixes. Any given glide path may be too steep for some people and too shallow for others, depending on their circumstances. As an investor, you can compensate for that by choosing funds dated later or earlier than your targeted retirement date. If the 2030 fund gets too conservative too fast for your taste, for example, you could choose the 2040 fund instead.

Despite the downsides, you’re likely to be much better off in a target date fund than you are in some of the other options. Too often novice investors take too much or too little risk without realizing it. They may have all of their money in “safe” low-return options, which means they’re losing ground to inflation. Or they may have all their money in stocks, including their own company’s stock, and would be unprepared for a downturn wiping out a good chunk of their portfolio’s value.

Even those who know they should diversify often do it wrong by randomly distributing their contributions across their investment options. If you don’t know what you’re doing, or you simply prefer investing professionals to take charge, target date funds are a good way to go.

Monday’s need-to-know money news

wall_street_zombie_moneyToday’s top story: Frightening types of 401(k) fees. Also in the news: It’s time for open enrollment, how to avoid bringing zombie debt back from the grave, and the staggering amount of money behind all things pumpkin.

3 Frightening Types of 401(k) Fees
The dark side of retirement funds.

Nov. 1 Means It’s Time for Health Insurance Open Enrollment
Time to purchase health insurance.

1 wrong move can bring ‘zombie’ debt back from the grave

If you thought the pumpkin spice craze was a bit much, look at this number
Pumpkins are a smashing success.

Wednesday’s need-to-know money news

common-retirement-mistakesToday’s top story: How to tell if your 401(k) is a dud. Also in the news: How to find unclaimed property, great tax deductions for retirees, and how to sneak more savings into your budget.

How To Tell If Your 401(k) Is a Dud
Reviving your retirement fund.

Are You Owed Money From a Forgotten Bank Account?
You could have unclaimed property.

5 Great Tax Deductions and Credits for Retirees
Maximizing your deductions.

How to Sneak More Savings Into Your Budget
You won’t even notice it’s gone.

How the Wrong Choice Could Ruin Your Spouse’s Retirement

1403399192000-retire-workThree key decisions about retirement benefits can help couples make their money last — or dramatically increase the chances the survivor will end up old and broke.

Widowed women are twice as likely as their male counterparts to live in poverty during retirement, according to a March study by the National Institute on Retirement Security. But anyone who outlives a mate can be vulnerable to a big drop in income and lifestyle because of shortsighted decisions about claiming benefits.

In my latest for the Associated Press, how to make the right choices for your retirement.

Monday’s need-to-know money news

401k-planToday’s top story: Why long-term care insurance is worth the expense. Also in the news: The differences between a 401(k) and a Roth 401(k), how to make yourself a better retirement saver, and keeping an eye out for electricity surge pricing.

Long-Term Care Insurance Is Worth the Expense
Paying now can save a lot later.

You Know About the 401(k) — But What About the Roth 401(k)?
Know the differences.

5 Ways to Make Yourself a Better Retirement Saver
Taking the long view.

Beware of Surge Pricing on Your Electric Bill
Running your air conditioner just got a bit pricier.

Friday’s need-to-know money news

Financial-PlanningToday’s top story: How to find the best mortgage rate online. Also in the news: How to set up your first 401(k), what happens if you work after signing up for Social Security, and why we value purchases more when we pay with cash.

How to Find the Best Mortgage Rates and Lenders Online
Comparison shopping.

Class of 2016, Here’s How to Set Up Your First 401(k)
Happy Graduation! Time to focus on retirement.

What Happens if You Work After Signing Up for Social Security?
What you can and cannot collect.

Why We Value Purchases More When We Pay With Cash
The psychology of spending.

Thursday’s need-to-know money news

hidden-fees1Today’s top story: Scams to watch out for. Also in the news: Understanding Social Security spousal benefits after divorce, fixing a critical 401(k) flaw, and new airline luggage fees.

Scams Called ‘Worst’ of Consumers’ Top 10 Complaints
Don’t fall for them.

Divorce Doesn’t Preclude Social Security Spousal Benefits
Understanding the complicated rules.

How fix a critical flaw in 401(k) plans
Adjusting your retirement savings.

Some Airlines Have Rolled Out a New Luggage Fee
Pack appropriately.

Wednesday’s need-to-know money news

iStock_000015900242LargeToday’s top story: Critical steps to prepare your finances for divorce. Also in the news: Tips on taking over the family business, getting your credit back on track after moving back to the United States, and how to tell if your 401(k) is helping or hurting your retirement savings.

6 Critical Steps to Prepare Your Finances for Divorce
Protecting your assets during a vulnerable time.

Tips on Taking Over a Family Business
Making a smooth transition.

After Moving Back to U.S. From Overseas, Credit Card Is First Step to Rebuild Credit
Getting your numbers back on track.

Is your 401(k) helping or hurting your retirement savings?
Finding a best-in-class 401(k).

Think Twice Before Rolling Over a 401(k)

think-twice-before-401k-rollover-story-570x225-2Wall Street has done a remarkably thorough job of brainwashing investors into rolling their old 401(k) accounts into individual retirement accounts.

IRA rollovers are certainly a better option than cashing out, which is the stupidest thing you can do with a 401(k) account other than not fund it in the first place. But moving money from a workplace retirement plan to an IRA when you switch jobs or retire can be a really lousy idea.

In my latest for Nerdwallet, why you need to think twice before rolling over a 401(k).