I’m frequently asked by people facing layoffs or early retirement whether or not it’s better to keep your pension and 401(k) or roll them over to a traditional IRA (assuming the pension allows lump-sum rollovers). Here is a table comparing these choices. Given all these differences, what’s the right choice? It depends. If you are…
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According to a recent Employee Benefit Research Institute study, the proportion of retirees living below the poverty line has been growing steadily since 2005. Poverty rates for people ages 65 to 74 climbed from 7.9 percent in 2005 to 9.4 percent in 2009. The increase was even steeper for older retirees, jumping from 7.6% to…
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I mean that quite literally. Volatility causes a drag effect on investment returns. And although modern portfolio theory teaches that investments with expected higher returns generally have higher volatility, volatility itself always negatively impacts returns. This is not a theory but a mathematical fact that can easily be demonstrated. Let’s take a hypothetical example. You’ve…
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In today’s blog we explore the world of leveraged ETFs. For those of you who are not familiar with ETFs (Exchange-Traded Funds), they are mutual funds that are bought and sold like stocks. The majority of ETFs are passively managed and based on some index, allowing the investor to purchase a single fund that represents…
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