Posts Tagged ‘financial analysis’

18 Nov 2013
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3 Easy Steps to Understanding you IRA and 401K Limits for 2013

IRA and 401k Limits for 2013

Whether you have a personal IRA or a company sponsored 401K one crucial thing to know is how much you can add or contribute to that account each year before you get penalized, in other words your IRA and 401k limits for 2013. The IRS has strict rules regarding your maximum contribution and will impose hefty fines upon those individuals who contribute more than they are legally allowed. We have provided 3 easy to understand steps to help you understand how much you can contribute to either your IRA or 401K each year.

1st: You need to know which type of account you have.

The contribution limits differ depending on whether you have an IRA or a 401K. IRA literally stands for Individual Retirement Account. An IRA can be sought out privately and some employers provide IRA benefits. There are also different types of IRAs such as: traditional IRAs, Roth IRAs, and SEP IRAs. A 401K is typically part of an employee benefit program where an employer contributes a certain percentage of an employee’s income each year. You should be able to determine which type of account you have by looking at your monthly/quarterly statements. If you are still unsure then you should contact account servicer and ask for details.

2nd: You should know the difference between contribution limits for either an IRA or 401K.

IRA limits for 2013:

As of 2013, the new contribution limits for IRAs (both Roth and Traditional) is $5,500 per year collectively. You may have more than one IRA. If so then you can add money to either account but your total contributions cannot be more than $5,500 per year. If you are over the age of 50, then you can contribute and additional $1,000 per year, or $6,500 total (this is commonly referred to as a “Catch-Up Period.”) The same contribution limits will be true for 2014.

401k Limits for 2013

Since 401K plans operate differently than IRAs the contribution limits are different too. As of 2013, you can contribute up to $17,500 per year as an elective salary deferral to your account. In other words, the amount you choose to set aside each paycheck to go into your 401K cannot exceed $17,500 collectively during the year. This amount does not include employer contributions. The total of your elected savings into your 401K plus the amount your employer contributes cannot exceed $51,000 for 2013 and $52,000 for 2014. Finally, if you are over the age of 50, you are allowed an additional contribution of $5,500 each year.

3rd: Set goals for yourself and keep track of those goals.

It is important to have a firm understanding of where you are now and where you want to be in 5, 10, or even 20 years from now. Understanding your contribution limits is an excellent way to avoid unnecessary fees, but it is also a way to set goals for yourself. Think about the power of compounding interest and how much more effective that it would be if you were adding as much money as you could afford to the equation every year. USelfDirect.com is packed with tools and resources, like IRA calculators, to help you make the most out of your retirement account. Feel free to explore the site or give one of our representatives a call today.

 

 

 

 

 

 

Sources:

www.irs.gov

http://taxes.about.com/b/2012/10/23/ira-contribution-limits-for-2013.htm

http://taxes.about.com/od/retirementtaxes/qt/401k-contribution-limits.htm

www.uselfdirect.com

 

 

27 Jun 2013
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The Rule of 100 – How to use this investment tool.

Investors are always trying to evaluate risk and how much risk they are willing to take on within their portfolios. A great amount of risk can potentially result in a large reward; it can also lead to an equal or greater amount of loss. For some investors, more risk is a good thing because they have time and resources to fall back on. For others, risk is something to minimize. So how do you know what amount of risk you should be taking on?

The “Rule of 100” is a simple way to estimate how aggressive your investments should be. We have provided an easy-to-read infographic that will teach you how to use the “Rule of 100” and what it can show you about your portfolio.

Keep in mind that the Rule of 100 is a tool that helps make estimations from a general prospective. Each person is different and your investment strategy may not reflect exactly what the Rule of 100 shows. That is OK. The purpose is to have investors thinking about what changes to make to their portfolio as they get older. Try to use this investment tool on your own. What does it tell you? We would also love to talk to you about how to use this tool and other investment resources we have. Feel free to give us a call or email.

Here at USelfDirect we believe in empowering investors through education. Our team of experienced Self Directed Investment professionals are here to help answer your questions. We have years of experience and have seen nearly every type of account, investment, tax issue, funding method, and question imaginable. Give us a call and let us offer our expertise.

For more information on this investment tool or on others, please send us an email at info@uselfdirect.com

Also try some of our other investment tools by clicking here

27 Jun 2013
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The Rule of 72 – How to use this Investment Tool

One of the most common tools we teach our clients about is the “Rule of 72.” This rule allows you to quickly estimate the future value of your money as it pertains to the returns you are receiving right now. Even Albert Einstein recognized the strength of the time value of money!

One of the biggest difficulties investors face when analyzing investments or planning for retirement is understanding how to estimate what returns they should be receiving NOW in order to have the money they want in the future. Fortunately there are some easy to use tools that can help any investor better analyze returns. One of those tools is the “Rule of 72.” We have provided an easy guide to understanding how to use this tool and how it can help you invest smarter.

Here at USelfDirect we believe in empowering investors through education. Our team of experienced Self Directed Investment professionals are here to help answer your questions. We have years of experience and have seen nearly every type of account, investment, tax issue, funding method, and question imaginable. Give us a call and let us offer our expertise.

For more information on this investment tool or on others, please send us an email at info@uselfdirect.com

Also try some of our other investment tools by clicking here