Your Retirement and Your Business
It's estimated that more than 500,000, or 10
percent, of small businesses close their doors each
year. Though the reasons for closing vary, for
business owners it may mean the difference between
a comfortable retirement and just getting by.
Allocating too much of your retirement investments
to one company - even your own - is a risky
proposition. If your business has not performed as
well as expected by the time you are ready to sell or
leave, you may not be able to retire in the manner in
which you had hoped.
One way to help reduce the level of risk in your
retirement portfolio is to diversify your retirement
assets. Mutual funds offer an easy and efficient way
to invest, and they offer many benefits.
When you invest in a mutual fund, you become part
owner of a large investment portfolio made up of
dozens or even hundreds of securities that is
invested to meet a specific objective. By pooling
shareholders' money, a mutual fund can invest in a
more diversified portfolio than investors would be
able to achieve on their own.
A professional money manager (or a team of
managers) conducts research and performs extensive
analysis on various investment options to decide how
to invest the mutual fund portfolio. These investment
professionals constantly monitor their fund's
investments and performance to ensure that they
continue to seek their stated objectives.
There are more than 8,000 mutual funds to choose
from, with investment objectives ranging from safety
of principal to fixed income to aggressive growth.
Some mutual funds also let you choose among a
variety of share classes.
Liquidity and Convenience
Mutual funds are liquid investments that typically can
be bought and sold on any business day. Most fund
companies also offer such services as automatic
investment plans and automatic reinvestment of
The investment return and principal value of
mutual fund shares fluctuate with market conditions.
Shares, when sold, may be worth more or less than
the original amount invested. Mutual funds are sold
only by prospectus. Please consider the investment
objectives, risks, charges, and expenses carefully
before investing. The prospectus, which contains this
and other information about the investment
company, can be obtained from your financial
professional. Be sure to read the prospectus carefully
before deciding whether to invest.
If you want to diversify your retirement assets,
mutual funds may be an option worth exploring. Call
for more information on investing for retirement.
Spring has sprung and the mailboxes have been full
of credit card solicitations. But before you shred
these offers (and I do mean shred-identity theft is
widespread these days) take a careful look at what
is actually there. In the past two weeks we have
been notified by two of our credit card companies
that the terms have changed and not in our favor.
Here is just a few of the changes we have seen:
international charges will now carry a 3% fee on
each transaction, grace periods have
shortened and interest rates have risen. It really
pays to read the fine print!
Time to Share. Create a Buzz. South
Habitat for Humanity: Neighbors Helping Neighbors.
South Shore Habitat was founded in 1986 and has
complete 37 homes for low-income families, totaling
67 adults and 133 children. This spring, houses will
be built in Duxbury and Brockton. The 12th Annual
Birdhouse Show will be April 29-May 1 ,held at the
Shore Plaza, will surely delight. The Annual Gala &
Auction will be held Saturday, May 7, at the Reebok
Headquarters in Canton, will be an unforgettable
evening of food, entertainment, and amazing auction
items. Visit their website to learn how
you can get involved.
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|The High Cost of Credit
If you are like many Americans, you may be carrying
more credit cards in your wallet than dollar bills.
Overall credit-card debt has reached around $785
billion, which translates into $7,500 for the average
Some forms of debt, such as auto and home loans,
can be invaluable because they help people purchase
expensive assets that would be difficult to obtain
otherwise. Alternative forms of debt, such as credit-
card debt, can give people a false sense of financial
|Interest Rates Back in the Limelight
In March, the Federal Reserve raised key short-term
interest rates for the seventh time in nine months.
As with other rate increases, policymakers said the
decision was based on attempts to contain inflation.
The Fed raised the two key rates by 25 basis points
(one-quarter percent) each, as it has done at each
of its past six meetings. The increases came as no
surprise, but they were couched in stronger language
than the Fed has used since it began a rate-raising
cycle in June 2004.
|Understanding IRA Distribution Rules
According to a recent study, 83 percent of people
started working with a financial professional to build
a retirement fund. Given the complexity of the rules
surrounding IRAs and employer-sponsored retirement
plans, it's easy to understand why.
Consider the distribution rules. After age 59½, you
can begin withdrawing funds from tax-deferred
retirement plans and avoid the 10 percent early-
withdrawal penalty. If you decide to wait, you
generally must begin taking required minimum
distributions (RMDs) from these plans once you reach
age 70½ (Roth IRAs and annuities are exceptions). In
succeeding years, minimum annual distributions must
be taken no later than December 31. Failure to take
the required annual distribution could result in a 50
percent income tax penalty on the amount that
should have been withdrawn.
|Don't Go Light on Liability
Personal injury lawsuits seem to be America's latest
craze. As a result, litigation is often the unintended
outcome of many common accidents and
misunderstandings. Not only are more individuals
being sued, but juries are becoming less sympathetic
to defendants. Between 1996 and 2002 (the latest
year for which data is available), the dollar value of
jury awards increased by 112 percent!
In this type of environment, even the maximum
coverage on your homeowners and auto insurance
policies may not be enough to fully protect your
assets against a potential lawsuit. Umbrella liability
insurance can provide an extra layer of protection to
safeguard your assets.
|Mutual Approach to Retirement
A 2004 Investment Company Institute study
confirmed the popularity of mutual funds among
middle-income Americans who are planning for
retirement. In line with popular wisdom, these
investors typically adopt a buy-and-hold strategy,
waiting out periods of market decline in the hope of
reaping long-term gains.
Considering the large number of investment options
available to working Americans, why do so many
people continue to hold mutual funds? The answer
may lie in the potential benefits.
|Five things to do with your tax refund check
It seems like "snail mail" these days only yields bills
and catalogs, but many of us look forward to one
certain piece of mail each spring - our tax refund.