Saturday, March 10, 2012

Rewarding Lifestyles: Retirement is more than money

I realize this article is a bit old, but the advice is golden and timeless:

I really like how it addresses not only the financial aspects of your life, but other important things that lead to happiness as well. I am not a Merriman client, but from what I've read, they seem to take a no-nonsense approach to managing their clients' portfolios, which is a good thing for their clients.

Saturday, February 18, 2012

My 401k is at 401K!

As of today (or EOB yesterday), my 401k account balance is officially sitting at $401.5K. Of that amount, my contribution = $205K.

My current 401k plan balance:

S&P 500 Index Fund: $127.5K
U.S. Small/Mid-Cap Equity Index Fund: $125.2K
International Equity Index Fund: $148.8K
Balance as of 02/18/2012 :$401.5K

My ROTH IRA balance, on the other hand, is only at ~$52K (I put in $45K of it). I wish the government would let people contribute more to IRAs. I'm thankful I can do both, but my 401k balance is blowing my ROTH savings out of the water.

I am a huge proponent of 401k plans. Your 401k account is probably the most legally protected savings vehicle you will ever own. If you walk away from your house, your mortgage lender can't get at it. If you get sick and rack up huge medical bills that you are unable to pay, they can't tap into your 401k. If you get sued or have to declare bankruptcy, your 401k balance is protected. Insurance may protect you from many of these things, but it doesn't offer nearly the level of blanket protection.

In addition, I believe most social benefit programs don't count 401k balances against applicants for the purposes of granting benefits. If you have a significant amount of money in after tax accounts or other types investments though, you will likely be denied due to the asset tests. For example: Increasing Retirement Saving: Clarifying Food Stamp Asset Test Rules.

While most of us may never need to worry about these things, we should at least be aware of all the facts in order to make the best assessment on our saving options. I see a lot of people rag on 401k plans as it seems to be a popular thing to do, but they don't seem to consider all the facts before making important decisions.