Tag Archives: income

The Five Biggest Financial Issues for Pre-Retirees

The last several years have been hard for many people.  There are unique challenges for different segments of the population.  In this article, I am going to focus on the issues specific to people who are approaching retirement and will soon be living on investment income and other forms of non-wage income such as pensions, social security, etc.

The top five financial issues, as I see them, are: Continue reading

Sanity Checking Estimates of ‘Expected Returns’ in Retirement Planning

One of the most important variables in creating an investment strategy to meet a specific goal (such as retirement) is what you assume about the future returns from stocks, bonds, and other available investment opportunities.  Another highly important input to planning is your estimate of the risk associated with each investment alternative.  These estimates of future risk and return will determine how much you need to save, when you can expect to retire, and how much income you can expect in retirement.  Where do these estimates come from?  Continue reading

Tax Loss Harvesting Season is Here

Believe it or not, year-end is right around the corner which means that it’s time for investors to start thinking about their tax implications. In order to help you make sense of it all, we wanted to share this article originally published last year by guest blogger Steve Thorpe. Enjoy–

Would you invest a few short hours to reduce this year’s taxes by $1,000 or more? For investors with taxable investment accounts, this is often possible by taking advantage of tax loss harvesting (TLH). This perfectly legal strategy makes lemonade from lemons, allowing Uncle Sam to share part of the pain of the losses inevitably experienced by investors at some points during their investing career

Between now and the end of the year is a good time to review your portfolio to see if any of your holdings are in the red. If so, you might be able to use those losses to help lower your 2010 tax bill.

In this article I’ll review:

  1. How to harvest a tax loss and under what circumstances you might want to.
  2. Why you need to keep track of what your investments cost in the first place.
  3. How to properly rebalance your portfolio after a sale, without triggering undesirable tax consequences.
  4. The way investments look from a tax perspective: short-term losses can be more valuable than long-term losses. But hold onto gains at least a year and a day.

Continue reading

Mel Lindauer on Income Investing

Yesterday Mel Lindauer, Forbes columnist, book co-author, Boglehead extraordinaire, offered some advice for younger investors. Rocky markets like the one we’ve been bobbing along in are great for the young, Lindauer argued, because investments are essentially “on sale” at the moment.

But the perfect market for someone in their 20s is a tough one for someone in their 60s. The last few years have been extremely tough for those close to retirement. In today’s post, drawn from the same interview with Lindauer, he addresses the challenges older investors face and the downside of a down market. Continue reading