Archive - October 18, 2010

1
How To Increase Your Retirement Savings 28%
2
Why Mutual Fund Fees Are Misleading
3
Should You Reset Your Social Security Benefits?

How To Increase Your Retirement Savings 28%

Article in Summary:

  • Many small business 401k providers are more interested in generating revenues for themselves than maximizing your employee’s retirement savings.
  • Independent third-party administrators (TPA) are pension plan specialists that design a better 401(k) plan
  • The savings in fees from using a TPA can result in s 28% increase in retirement savings

The vast majority of small business 401(k) providers are broker dealers and insurance companies who provide a “bundled service.” In other words, the design of the plan, the investment selection, and the custodian are all the same company. These “plan salespeople” are often not well versed at …

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Why Mutual Fund Fees Are Misleading

According to a study released a few years ago by the Zero Alpha Group, almost half of the expenses of the top 30 domestic equity funds are omitted from their reported expense ratios.  The funds included in the study have about $750Billion of the approximately $7Trillion in mutual fund assets nationwide.

Edward O’Neil, assistant professor of finance at Wake Forest University, conducted the study.  He added the cost of trading incurred in portfolio turnover.  Transaction costs included brokerage expenses and implicit bid-ask spreads.  For some funds, the study found transaction costs exceed 400% of their expense ratios.

If you or …

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Should You Reset Your Social Security Benefits?

You may have recently heard about how you can reset your Social Security benefits. Here’s how it works:

  1. You stop your benefit payment
  2. Pay back all you received
  3. Receive a higher benefit when you resume payments.

Social Security has proposed doing away with this option. So you’ll need to consider your options now.

Generally you may begin Social Security payments at age 62 for a reduced benefit relative to your “normal” retirement age. Delaying past 62, perhaps all the way to age 70, yields a higher monthly payment for the rest of your life. If you live long enough, you …

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