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Risk tolerance is a term you may have heard about when determining your investment strategy. While you might picture activities such as rock climbing or jumping out of an airplane when you think of risk, it has a different meaning when it comes to investing. Risk tolerance refers to how comfortable you are with volatility and periodic downturns in your investment portfolio. Investments come with a wide variety of associated risks. On the low end of the spectrum might be an FDIC-insured savings

The employer-sponsored 401(k) has largely replaced the company-funded pension plan as the primary source of retirement savings for most Americans. Unlike a pension, however, 401(k) benefits are not automatic. Employees must choose whether or not to participate and then decide how much to contribute and how to best invest their contributions. One of the most important decisions you can make is how much of your earnings to contribute to your 401(k). While the answer to this question depends on yo

You just started a new job and have come across information about your company’s 401(k) in your benefits paperwork. You may be wondering what exactly it is and whether you should sign up. The 401(k) plan got its name from the portion of the IRS tax code that governs its use. In the past, most employees received guaranteed monthly retirement income through an employer-funded pension plan. But those days are long gone, and the once common benefit has been largely replaced by the employer-sponsore

What if, one day, you can no longer dress yourself or tie your shoes? Someone turning 65 today has an almost 70% chance of needing some form of long-term care (LTC) sometime in the future. And while many receive in-home care from relatives, that’s not feasible for others. They may not have someone who’s able to help, or they may need more care than can be provided at home. Finding long-term care is hard enough; paying for it can be an even bigger hurdle. Some elect to pay out of their savings.

Most of us expect to work until we voluntarily retire from the workforce. But there are any number of things that can and do prevent people from working: severe accidents, life-threatening illnesses like cancer, or memory loss from Alzheimer’s disease. It’s a long list that’s not fun to think about. Fortunately, there are both short-term and long-term disability insurance policies that can help protect you financially. What Does “Disabled” Mean? A wide range of conditions might qualify you for

It's the biggest purchase most people ever make, and with good planning and some preparation, it can be a solid financial move. If you don't already own a home, the idea of affording one can seem daunting. And with the national median house price expected to top $270,000 in 2020, just saving for the down payment can be a challenge.1. But it's one you can meet with a good plan and some discipline. While there are various ways to buy a home with less than 20% down payment, many experts don't reco

What do you do when your heart demands something, but your bank account says no? That's the dilemma that many, especially Millennials, find themselves in when they think about having a family. Even if your idea of a happy family isn't necessarily 2.5 kids, a dog and a house with a picket fence, financial realities are making it hard for many Americans to envision having any kind of family at all. When a New York Times/Morning Consult survey asked men and women aged 20-to-45 about their plans fo

While the cost of nuptials has held steady over the past few years, too many couples are planning to borrow to cover the cost. Here's how to avoid the debt trap. A wedding ceremony can range from picking out some nice suits and heading over to city hall to reserving a 200-guest blowout, with varying costs. But according to a survey by wedding website The Knot, the average cost of a wedding in the U.S. was $33,900 in 2019.1 All too often, young couples are planning to borrow in order to pay for

What comes to mind when you think of investment risk? Picking the wrong mutual funds for your 401(k)? Buying into a tech bubble? Purchasing a stock based on a tip from your buddy? Having too many stocks in your portfolio too close to retirement? Indeed, some of these things quite legitimately could be considered risky. But have you given any thought to the risk of doing nothing? In other words, the risk associated with not investing your money, not contributing to your 401(k), not increasing

One of the prime risk protections for your nest egg is time: Time to recover from market downturns. But what about once the sun sets on your working years and rises on your golden years? The first thing you have to remember is that there are different kinds of risks — aside from those posed by financial markets. Risky Business Many financial advisors recommend reducing the inherent risk in your portfolio as you approach and enter retirement. That often means moving investments from typically ri

Many people mistakenly assume that the time for owning stocks is over once they hit retirement. But such blanket statements are not true for everyone. There are a variety of factors that should affect how much of your portfolio, if any, should be devoted to equities during your golden years. Here are some factors to keep in mind: 1. Your life expectancy With people living longer, today’s retirement can span for decades. One of the main considerations for owning stocks is how long you can wait b

The three-legged stool is a metaphor that retirement planners use to describe the three most common sources of income for retirees. At one point in time, the three legs referred to Social Security, pension and personal savings — the multiple sources of income generally needed to achieve a financially secure retirement. More recently, however, fewer and fewer companies have offered pensions, replacing them with deferred contribution plans — the most common of which is a 401(k) plan. Personal sav

Adequate insurance coverage is the foundation of a sound financial plan. No matter how well your investments perform, an unforeseen emergency such as a fire, theft or natural disaster may leave you completely unprepared not only to meet the financial needs of your retirement, but your immediate needs as well. This is why it’s vitally important that you review your homeowners and other insurance policies on at least an annual basis (and when your circumstances change) to make sure they’ll provid

You probably already have homeowners and auto insurance. But there are many other types of policies that can help safeguard you and your family from unforeseen financial disasters. Speaking to a qualified insurance agent and reviewing your coverage and personal circumstances is a prudent course of action to help ensure that you and your family have adequate protection. Here are some often-overlooked common types of coverage that can make recovery easier in the event of an insured loss: 1. Flood

Estate planning can be simple or complex depending on your particular circumstances. However, there are certain basic documents that everyone should consider preparing to ensure their wishes are carried out should they become incapacitated and in the event of their passing. Will or Trust. Both of these documents specify who will receive various assets upon your death. They can include homes, savings and investment accounts, personal effects (like collectibles, jewelry and furnishings), business