Funding Your Retirement: The 401K and 403B Way Written by MomsBudget
Saving for your retirement doesn't have to be a nightmare as long as you are aware of your options. For now, we're focusing on 401K and 403B retirement plans. These two plans are essentially same except that for-profit companies use 401Ks and non-profit companies, such as government, use 403Bs.An employee contributes to a 401K plan with pretax salary. This means that this account appreciates without taxation until you retire or leave company. So, 401K contributions are not included in your reported income. In essence, you receive an immediate tax deduction for your contribution. Many employees offer an automatic payroll deduction, so there isn't any extra effort involved for you. Matching contributions or partial matching contributions are other incentives offered by employers. For instance, my employer matches every one of my dollars with a quarter. Sounds like small potatoes, but remember beauty of compound interest. Of course, there are rules and regulations. You are typically limited to a percentage of your income or $10,500 annually, whichever is less. So what happens if you leave your company? You have 3 options: leave it as it is, roll it over into another tax-deferred retirement account such as an IRA or withdraw it all. However, early withdrawal penalties, that is before age 59-1/2, are stiff. Usually, it's a 10% penalty plus any taxes owed. So, if at all possible avoid withdrawing any funds before age 59-1/2.
| | CREATING YOUR FIRST INVESTMENT CLUBWritten by Thomas A. Hilton, Jr.
An investment club is a group of people who meet at least once a month to increase their investment knowledge. They agree to contribute a predetermined amount of money which they then pool together to invest, typically, in stock market. Depending on extent of trading knowledge of members, monthly contributions can be modest, ranging between $20 and $50. Mostly, clubs of this nature are to give each member an affordable way to learn how to purchase stocks. Once you've gained enough confidence, knowledge and experience - you would normally expand outside club and create your own personal portfolio of stocks. Before I share with you about how to create your first investment club. Let me explain what your normal investment club is like. Normally, an investment club is made up of - between 10 to 20 members. Each member is required to bring some knowledge or research to table about potential stocks. The meetings are to discuss stocks as a group and then to decide on which stocks should be invested in by group as a whole. One of most important items on agenda to agree on before looking at any particular stock is to agree on philosphy of clubs trading goals. It's best to agree on this early into group to avoid arguements later on. For example, someone in their twenties might prefer to invest in riskier stocks while someone in their retirement years would prefer to invest in stable and slow growth stocks for safety purposes. It's normally best to choose your members carefully first by similar goals. According to National Association of Investors Corporation, there are over 50,000 investment clubs in operation in United States. These clubs are made up of many different groups of people with many different investment strategies. You have clubs made up of all women in their retirement years, you have church groups that have formed investment clubs, you have all black businessmen investment clubs that focus on investing to give back to their communities. I'm going to share with you how easy it is to create your own investment club by sharing with you a little information about one I'm forming at this very minute. As you know, I published eBook "An Entrepreneur's Approach to Buying & Selling on Wall Street". When I began sharing some of information and stock picking strategies found in that book with some of my friends from church. They were very interested in learning more about how I was able to choose stocks that produced such remarkable gains. So, I agreed to create an investment club where I would actually teach them first hand as a group how this system works. We met at my house one night to discuss just what would be involved and to iron out just a few minor details before we could even begin. First, we as a group decided to
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