Archive - November 2010

1
Be Sure To Read the Fine Print When Refinancing
2
Be an Investor, Not an Asset Allocator
3
Here’s What You’ll Be Able to Contribute to Your Retirement Accounts in 2011
4
How To Decide If You Should Convert to a Roth IRA

Be Sure To Read the Fine Print When Refinancing

It’s a great time to buy or refinance a home. Interest rates are extremely low (recent 30 year fixed rates are as low as 4%!). While this great interest rate opportunity creates a terrific chance to lower your monthly payment, it also can create confusion. The confusion lies in understanding the good faith estimate (GFE) and the HUD closing statement.

The GFE is the proposal the lender sends to you outlining your projected closing costs and the new mortgage payment amount. So often people will only look to the bottom line of their GFE to determine their new monthly payment …

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Be an Investor, Not an Asset Allocator

While I  respect the concept of diversification, I also believe that you can become too enamored with Modern Portfolio Theory and statistical backtesting when creating an investment strategy.  This seems to be a common problem among the investing public today, due largely to the way the investment industry has promoted and institutionalized the process.

There was a time, before the advent of mutual funds, when stock brokerage firms were compensated largely by commissions earned from recommendations.  Obviously, some of  the firms and brokers were skilled at analyzing ideas, and many were not. The focus was on research, not investment banking …

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Here’s What You’ll Be Able to Contribute to Your Retirement Accounts in 2011

2011 limits for contributions to retirement accounts are mostly unchanged with minor changes in the amount of income in determining eligibility or deductibility for certain retirement accounts or credits. Below are some of the highlights:

  • The elective deferral (contribution) limit for employees who participate in section 401(k), 403(b), or 457(b) plans, and the federal government’s Thrift Savings Plan remains unchanged at $16,500.
  • The catch-up contribution limit under those plans for those aged 50 and over remains unchanged at $5,500.
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are
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How To Decide If You Should Convert to a Roth IRA

Congress lifted the income ceiling in 2010 for conversion of a traditional IRA to a Roth IRA. So lots of people are wondering if a conversion is a good idea.  The answer is – as it so often the case – that it depends.

What’s the difference between the two types of IRAs?  Contributions to a traditional IRA might be partially or fully tax deductable, so this type of retirement account has some or all of the balance subject to tax when the money is withdrawn.  Also, with a traditional IRA, you are required to withdraw a portion of the …

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