*You should consider carefully the consequences of an in-service distribution. Distributions from your pre-tax TSP account are subject to federal income tax, and an additional 10% penalty tax will generally apply to distributions made prior to age 59½. The taxation of in-service withdrawals from a Roth TSP account depends on whether the distribution is a […]
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Four Numbers You Need to Know
When it comes to your finances, you might easily overlook some of the numbers that really count. Here are four to pay attention to now that might really matter in the future. 1. Retirement plan contribution rate What percentage of your salary are you contributing to a retirement plan? Making automatic contributions through an employer-sponsored […]
What is an ERISA fiduciary?
The Employee Retirement Income Security Act (ERISA) was enacted in 1974 to protect employees who participate in retirement plans and certain other employee benefit plans. At the time, there were concerns that pension plan funds were being mismanaged, causing participants to lose benefits they had worked so hard to earn. ERISA protects the interests of […]
Are You Ready to Retire?
Here are some questions to ask yourself when deciding whether or not you are ready to retire. Is your nest egg adequate? It may be obvious, but the earlier you retire, the less time you’ll have to save, and the more years you’ll be living off your retirement savings. The average American can expect to […]
Is It Wise to Trade Your Pension for a Lump Sum?
Most private employers have already replaced traditional pensions, which promise lifetime income payments in retirement, with defined contribution plans such as 401(k)s. But 15% of private-sector workers and 75% of state and local government workers still participate in traditional pensions.1 Altogether, 35% of workers say they (and/or their spouse) have pension benefits with a current […]
Tax Benefits of Home Ownership
Buying a home can be a major expenditure. Fortunately, federal tax benefits are available to make homeownership more affordable and less expensive. There may also be tax benefits under state law. Mortgage interest deduction One of the most important tax benefits of owning a home is that you may be able to deduct any mortgage […]
Is Smart Beta a Smart Strategy for You?
Traditional investment indexes such as the S&P 500 are weighted based on market capitalization, the value of a company’s total outstanding stock. This means the largest companies in the index may have much greater influence on index performance than smaller companies. For example, the 10 largest companies in the S&P 500 account for more than […]
What Do Bond Rating Agencies Use?
Bond rating agencies typically use similar scales, and it may be helpful to understand how to compare ratings from multiple agencies. This chart compares bond ratings in descending order of creditworthiness (from left to right) as judged by the three best-known credit agencies. Standard & Poor’s and Fitch Ratings use the symbols + and – […]
What are Bond Ratings?
Bond ratings are an essential tool when considering fixed-income investments. Ratings provide a professional assessment of credit risk, or the risk of default, which can be measured to some degree by analyzing the bond issuer’s financial condition and creditworthiness. Credit rating agencies perform this type of analysis and issue ratings that reflect the agency’s assessment […]
Spring Cleaning Your Finances
The arrival of spring often signifies a time of renewal, a reminder to dust off the cobwebs and get rid of the dirt and grime that have built up throughout the winter season. And while most spring cleaning projects are likely focused on your home, you could take this time to evaluate and clean up […]
