New Rules for Converting to a Roth IRA

Posted on August 2, 2012 | Financial Planning

Prior to January 1, 2010, only taxpayers who met certain income requirements were allowed to convert funds in a tax-deferred account (e.g., traditional IRA, 401(k), 403(b), 457, SEP-IRA) into a Roth IRA. Now this restriction has been removed. Since you will still have to report the converted funds as income and pay the associated taxes, you need to consider whether converting funds to a Roth IRA is beneficial for your particular financial situation.

There are several factors that could influence your decision to convert funds.

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Due Diligence: 10 Steps to Avoiding Ponzi Schemes and Financial Fraud

Posted on July 27, 2012 | Financial Planning

Bernie Madoff is now behind bars. But the uncovering of his enormous and long-running Ponzi scheme, and the fraud committed by several other financial hucksters, highlight the importance of asking the right questions and doing your own due diligence before selecting an advisor or participating in an investment.

What areas should you focus on when performing a due diligence review?

Here are 10 basic steps all investors can take—as well as certain indicators that should serve as red flag warning signs of the potential for trouble down the road.

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The 10 Myths of Retirement Planning

Posted on July 18, 2012 | Financial Planning

Retirement planning requires a clear-eyed analysis of future needs and income. Yet many individuals view retirement through rose-colored glasses.

Here are some of the most common myths and how you can bring reality into focus.

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529 College Savings Plan

Posted on June 26, 2012 | Financial Planning

With tuition costs rising every year, saving for college is a top priority for most families with children. A 529 savings plan, also called a qualified tuition program, allows you to build up savings to pay for qualified higher education at eligible institutions using tax-free dollars. 529 plans were named after a section of the tax code and are offered through states.

There are three types of 529 plans: traditional savings plans, prepaid tuition plans, and independent plans.

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Does Social Investing Generate Higher Returns?

Posted on June 1, 2012 | Financial Planning

Socially responsible investments have attracted much money, many investors, and many studies. We have studies of socially responsible mutual funds, socially responsible indexes, “sin” stocks, stocks with good and bad environmental records, and stocks with good and bad employee relations. But some parts of our knowledge are inconsistent with other parts and some gaps in our knowledge remain.

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The Role of Risk-Free Assets

Posted on March 30, 2012 | Financial Planning

Treasury bills and other cash investments have the advantage of liquidity and little downside risk, but they offer no real long-term growth, and typically the income is the lowest among fixed-income alternatives.

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From Theory to Practice: How to Apply MPT Concepts to Your 401(k) Plan

Posted on March 12, 2012 | Financial Planning

Fortunately, you don’t need a Ph.D. in investment theory to benefit from the implications of MPT. In fact, the general concepts can guide you in better managing your own 401(k) portfolio. Just what is MPT?

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Reach Your Retirement Goals By Following 10 Basic Axioms

Posted on March 8, 2012 | Financial Planning

10 axioms of effective investing provide the critical cornerstone for guiding investment philosophy and making decisions. This will ensure that you meet the universal goal of creating financial wealth for retirement.

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AAII Investment E-Books

Posted on February 23, 2012 | Financial Planning

AAII’s e-books bring complicated investment topics down to earth in a concise and conversational way.

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AAII Asset Allocation Models

Posted on February 21, 2012 | Financial Planning

Our asset allocation models show you how to properly diversify a portfolio based on your tolerance for risk.

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