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Can I Take a Loan From my Cash-Balance Plan?
The IRS permits such loans, but it is rare to find a plan that allows it. In the vast majority of cases, you cannot. Though the IRS permits it, the administrative burden of a defined benefit plan is already significant for an employer, and it is much more likely that they will not make a provision for loans in the plan document. As far as the IRS is concerned, generally speaking, these plans have the same rules as other qualified plans. If a small partnership or LLC with a cash balance plan wants to put loan provisions into their plan document, they can do it. Continue reading...
What does Investment Grade Mean?
Investment grade refers to the highest quality of debt available, and usually means the bond has little risk of default. Determining a bond’s credit rating is typically handled by ratings agencies, which is far from a perfect process. Ratings agencies like Moody’s and S&P notoriously failed to rate mortgage backed securities as high risk in the months/years leading into the 2008 financial crisis, instead keeping them as investment grade even as the crisis took hold. Continue reading...
Can I Rollover My Old 401(k) into a New 401(k)?
Most 401(k)s will accept custodian-to-custodian transfers from old 401(k)s. If your new employer has a 401(k) plan, you can usually rollover your old 401(k) into a new one, but you will need to check with your new employer to find out for sure. Keep in mind that the choice of mutual funds and other investments in the new 401(k) might be totally different from the investment options that your old employer offered. This means that you might need to liquidate all of your positions in the old 401(k) and transfer the cash balance. Continue reading...
What are Periodic Distributions from a 401(k)?
Periodic distribution is a planned intermittent payment of cash from a 401(k). If you choose to have your money distributed periodically, you will usually have a choice between monthly, quarterly, or even annual payments. Money distributed periodically is not subject to the same 20% withholding the lump-sum payment is. The periodic payments are treated as wages, and, because plan participants taking these payments in retirement may find it easy to calculate what their income will be for the year, they can instead plan for their actual tax bracket, or opt-out of withholding if they prefer. Continue reading...
Is there a Benefit to Self-Managing?
An investor may be able to save money in management fees self-managing, but there are also limitations and risks. Perhaps the biggest risk is the role that emotion can play in investing. Even the most skilled professionals are tempted by emotions in the market - big declines like the financial crisis can make one second-guess whether the market has hope of recovering, and big gains can create confidence that leads to less prudent risk-taking. Continue reading...
What Is Fraud?
Fraud is a deceitful act with the explicit purpose of gaining an unlawful advantage or depriving a victim of their rights. It's a term that permeates various facets of our society, and within the realm of finance, fraud takes on many forms. In this article, we'll explore the concept of fraud, its types, and the significant consequences it can unleash. Continue reading...
What is an Exchange Rate and Its Role in the Global Economy?
Exchange rates, often seen as the heartbeat of global finance, serve as a mirror reflecting a country's economic health. But what drives these rates? This guide delves deep into the world of foreign exchange, shedding light on the core dynamics of currency valuation, from the historical origins of exchange rates to the modern-day intricacies of the FOREX market. Whether it's the geopolitical climate, inflation rates, or government interventions, numerous factors shape a currency's value on the global stage. As global trade continues to expand, understanding these rates becomes pivotal for businesses, investors, and even everyday consumers. By demystifying the factors influencing exchange rates, this analysis aims to empower individuals with insights into the ever-evolving world of finance, offering a comprehensive look into the mechanisms that dictate the pulse of global economic activity. Dive in and discover the multifaceted realm of foreign exchange rates. Continue reading...
FAQ: Model Portfolios
FAQ: What is the difference between AI Real-Time Patterns (RTP) and AI Pattern Search Engines (PSE)?
For a bright financial future, stay away from these 4 frequent traps.
Navigate the financial landscape with confidence by avoiding common traps. Learn how to manage student loans, high-interest debt, news consumption, and home buying decisions. Empower your financial future with informed choices and the help of AI tools Continue reading...