He thought that when they said that they would invest conservatively and carefully the closer they got to the date his daughter would actually need the money for college, that they had the right idea. They call this age-based asset allocation; and lots of people believe that this is all we need to see in a 529 fund.
Well, they aren’t far wrong. Except that when a 529 plan advertises age-based asset allocation, they’re just plain lying. They don’t do anything like it. When my colleague’s daughter lost a good bit of her college fund to the financial crisis, it was because her 529 people were still have heavily invested in risky stocks like they thought there was a good five years left before she went to college.
Or perhaps they’re not lying; perhaps they really do believe that investing 50% in risky stocks is conservative. One shudders to think of what they would do with your money if they were allowed to take a few risks.
I myself opened 3 529 accounts in my state for my three sons. The plan says that it only invested in a major mutual fund, that was convinced. I knew that if I went with my state’s 529 fund, I would get tax benefits. So I went right ahead. Only, the major mutual fund that they invested in turned out to be run by a manager who was accused of improper dealings. The fund underperformed terribly.
Actually, if I had done my research beforehand, I would have known that poorly managed mutual funds are not all that uncommon. Most 529 plans have a very short list of investment options to deal with. Also, most 529 plans invest mostly in stocks or mutual funds that are overwhelmingly domestic. Anything big goes wrong with the stock market corrects itself, and your 529 funds will evaporate.
What you need to do is basically to make sure what exactly they mean when they say “conservative”. You want them to as the time your child goes to college draws close, you want your 529 fund to truly invest conservatively – in certificates of deposit or anything else that at least ensures the safety of your principal.
Tags: The Best 529 Funds | American 529 Funds | Fidelity 529 Funds | Alabama 529 Fund | Black Rock 529 Funds | Use 529 Funds]]>
A 403b plan is not that different from the 401(k) that you are familiar with. It is a tax-deferred retirement plan. It allows you to contribute pretax dollars out of your salary every month so that you can save for your retirement. Basically, you’re allowed to contribute up to $16,500 a year. Your employer will have appointed a financial management company to administer and manage the company’s 403b employee retirement plans, and you can choose what mutual funds or other investments your money is to be invested in.
The basic difference is that not every kind of employer out there will offer you a 403b plan. Nonprofit groups, schools and governmental organizations – these are the employers that are able to offer you this option. Basically, the 403b is for the government and for very small employers. To help these people out, the law makes sure that the administrative costs of 403b plans are far lower than they are for 401(k) plans. In the 401k vs 403b head-to-head, the latter wins out in this respect.
What you save in administration costs on such a plan can be really insignificant, or it can be pretty big. A lot depends on what kind of investments you put your money in and the kind of money management approach – hands on or off – that the management company offers.
Whichever plan you go with – 401(k) or 403b, your overheads can be pretty high if you choose something like a variable annuity to invest your money in. Of course, 401(k) is always more expensive. But with something like a variable annuity that’s already quite expensive, the difference can be quite small.
You’ll find out how much you’re really paying for administrative costs by calling the department in your company that handles these things.
Both plans allow you to set aside no more than $16,500 a year in retirement savings. If you are over 50, you’re allowed a larger contribution in either. The good thing about the 403b plan is that you get to set aside an extra $3000. So basically, with the 403b plan, you might end up saving more for your retirement than you could with a 401(k).
In any 401k vs 403b comparison, the latter does the win out. It’s more flexible, it allows you to save more.]]>
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Hubpages is also popular among webmasters, internet marketers, bloggers, public relations practitioners, search engine optimization specialists and small busines owners because it can drive traffic to their websites and boost their rankings in the search engines. This is done through backlinking, or placing links on your hubs back to your site or your clients’ sites.
Some people on Hubpages do write for other people, and they would create backlinks for their clients.
However, there are 3 Golden Rules of backlinking from Hubpages:
EzArticleLink is a marketing platform that builds links to your sites on autopilot using the power of article marketing. You can get free membership to EzArticleLink through WealthyDonkey and if you sign up as our referral you get a bonus from us. But first let me tell you what EzArticleLink is. Before joining any program, you should have enough information to decide whether this is for you or not, regardless if there is a bonus or incentive for joining…
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