Roth Retirement Savings Plans
We found our disciplined friend, who thanked us, on behalf of his son, for having guided him in the decision about the savings plan. However, he tells us: my son is being asked if he prefers to invest in the traditional 401k or a Roth, what do you think? Roth plans originated in the Taxpayer […]
READ MORERetirement Savings Plans
We find our disciplined friend looking a little bit confused. After greeting us, he says: my son has just graduated and got his first job, they are offering him a retirement savings plan, but he is very young and I don’t know if it is a good idea, what do you think? Retirement savings plans[1], […]
READ MOREInvest or Speculate
We found our disciplined friend and noticed that he was in good spirits. After greeting us, he says: I have followed your recommendations and I have opened an account to start investing. I am already authorized to use margin, have access to the options’ market, and subscribed to information services dedicated to identifying assets that […]
READ MOREPortfolio Size and Safe Withdrawal Rates
Our disciplined friend calls us, somewhat distraught, to ask us how to estimate the size of the portfolio of financial assets that will support spending during retirement, and how to determine the maximum withdrawal rate year after year. Before we get into the details, let us take this opportunity to explain that simulation models have […]
READ MOREDesignated Beneficiaries
We meet our disciplined friend, whom we already know well, and he tells us: “I have already made a will and the other documents as you recommended. I assume that this establishes all beneficiaries, including those for my retirement accounts (IRAs).” Although wills are very useful in naming and instructing transfer of certain assets, there […]
READ MOREStressless Estates
The disciplined friend, whom we have already met before, tells us: “At the age of 50 we have managed to accumulate sufficient wealth, with financial assets and real estate. We’re going to name our kids as beneficiaries, and we’re going to talk to family and friends. Everyone will be clear about what to do in […]
READ MOREWhat is Sequence Risk?
Our disciplined friend, whom we met in the previous article, tells us: “Thinking about my retirement, I have invested in a volatile portfolio, with an expected average annual return of 6%, higher than my projected annual withdrawal rate (4% of the initial amount, adjusted annually for inflation). Therefore, the withdrawals are sustainable, and I should […]
READ MOREOrder of Withdrawals
You’ve been disciplined by saving and heeding advice to diversify between taxable accounts (banking and investment), tax-deferred accounts (401k, IRA, etc.), and non-taxable accounts (Roth, HSA, etc.) Now it’s time for retirement and the question arises: in what order should I use them? We will use two principles to order withdrawals: 1) Assets that appreciate […]
READ MORERelevance of the Social Security Pension
When most Latin Americans think of the social security systems we experienced in our countries, we usually think of low pensions and poor customer service. The Social Security system of the United States is often categorized along the same lines and, therefore, some people do not take it into account as a fundamental pillar in […]
READ MOREWho needs advice?
The main – but not the only – reason someone might need financial, or investment advice is a lack of sufficient knowledge. Although a core curriculum is beginning to form part of secondary education, personal finance management has remained absent from the curriculum of most university majors. In view of the above, self-study is the […]
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