Archive - January 13, 2010

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The Difference Between “Saving” and “Investing”
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Social Security: Average Indexed Monthly Earnings Explanation

The Difference Between “Saving” and “Investing”

As a financial planner, I work with clients of all ages and income levels. The basis of good financial planning is great communication between the clients and the planner. Clients are always encouraged to ask any question that pops into their mind. Recently, a young newlywed who is expecting her first baby was in the office and said: I have a very basic question: What is the difference between “saving” and “investing”?The Difference Between “Saving” and “Investing”

That is a great question because many people think saving and investing are one in the same. In reality they represent two distinct ways of managing your money …

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Social Security: Average Indexed Monthly Earnings Explanation

One of the key components of determining your Social Security retirement benefit is called the Average Indexed Monthly Earnings, or AIME (don’t you just love the acronym-loving Social Security Administration?  Errr… SSA.).  The AIME is calculated by taking the highest-earning (by index) 35 years of your working life while covered by Social Security, and then computing an average monthly amount based upon those indexed amounts.

Gobbledy-gook, right?  Okay, here’s another way to explain it:  as you work in a Social Security insured job, your earnings are recorded each year.  Each year the SSA applies an index to the year, based …

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