Good Financial Reads: Make the Most of Your 401k, HSA, and More

Following along with the blogs of financial advisors is a great way to access valuable, educational information about finance — and it doesn’t cost you a thing! Our financial planners love to share their knowledge and help everyone regardless of age or assets.

Catch up on the latest posts with this week's roundup:

5 Tips for Making the Most of Your 401K or 401B

by Andrew Mohrmann, Modern Dollar Planning

Here are the two best pieces of advice we can offer when it comes to actually selecting the investments inside your plan:

1. Make sure you select investment across the entire globe (US Stocks, International Stocks, Emerging Markets and Bonds)
2. Look for fund with the lowest expense ratios. These will typically be called “Index” funds. In many cases expense ratios on these funds can be as little as 1/10th of the cost of actively traded funds.

Allocating your percentages depends heavily on the funds offered by your company, your own tolerance for risk and how aggressive you need to be to reach your goals. If you’re in your 20’s or 30’s and have decades until retirement, you’ll likely want to be a little more aggressive with your money and consider putting 70-80% of your money in stock funds and 20-30% in short term bonds.

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Expect These "Unexpected" Expenses

by Brian Wright, Unitewright

Fun facts about June. It is the sixth month of the year. It is named after Juno, the Roman goddess of marriage and childbirth. It is one of 4 months with only 30 days. But most importantly, June is when the FIRST DAY OF SUMMER occurs. So without delay, here are some possible expenses to consider when putting together your June budget.

Schools Out For Summer: If you have young kids, you may have additional childcare costs during the summer. Those little monsters can’t watch themselves, now can they? So whether it is day care or day camp, make sure you are preparing for these additional expenses in the budget.

Mawwage: Wedding season is now upon us, so there is a good chance you know someone getting hitched this summer. If you are lucky, you can score a nice, inexpensive gift off the registry and can drive 20 minutes to the ceremony from your home. If you aren’t, and it involves serious travel with serious out of pocket costs to attend…well…you need better friends. Whatever the case may be, make sure it’s not only on your calendar, but also in your budget.

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10 Reasons the HSA Is Your Best Tax Shelter

by Daniel Wrenne, Wrenne Financial Planning

Our clients ask us all the time.. “What is an HSA? Should I use it? Why should use it?” This leads us to believe that there is some mystery and confusion surrounding HSA’s and we’re here to clear some of that up, as well as highlight some of the great benefits!

A Health Savings Account (HSA) is a tax-advantaged medical savings account that is generally available to those enrolled in a high-deductible health plan. Money in the account can help pay the deductible, and once the deductible is met, the insurance starts paying. Money left in the HSA account earns interest and is yours to keep.

Now that we have a basic understanding of an HSA, let’s move on to why it may be a good option for you.

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Why You Shouldn't Time the Market

by Cristina Guglielmetti, Future Perfect Planning

Buying low and selling high is the aim of the entire financial services industry, right? Yes. But that doesn’t mean it’s consistently possible. It just means a lot of people work really hard and spend a lot of money to convince you to try.

Investors – you and me included – are subject to a lot of biases. We are affected by our emotional state, by quirks of personality, by the news of the day, and by various fallacies that can all lead to irrational decisions. If the market falls 2% in a day, should you buy? But what if it falls more tomorrow? If it reaches a new high, should you sell? What if it will keep going higher for another week? Shouldn’t you try to figure it out?

Remember, to successfully time the market you have to time it correctly twice: when to buy, and when to sell. In fact, to successfully beat a benchmark over the long term, you need to accurately time the market 74% of the time.

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