A Decision Not Made is Still a Decision
Mar 27, 2024
Investment inaction is played out in many ways, often silently, invisibly, and with potential consequence to an individual’s future financial security, especially when it comes to retirement planning.
Let’s review some of the forms this takes.
Your workplace retirement plan.
The worst non-decision is the failure to enroll. Not only do non-participants sacrifice one of the best ways to save for their eventual retirement, but they also forfeit the money from any matching contributions their employer may offer. Not participating may be one of the most costly non-decisions one can make.
The other way individuals let indecision get the best of them is by not selecting the investments for the contributions they make to the workplace retirement plan. When a participant fails to make an investment selection, the plan may have provisions for automatically investing that money. And that investment selection may not be consistent with the individual’s time horizon, risk tolerance, and goals.
Distributions from workplace retirement planning and most other employer-sponsored retirement plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions. The 10% early withdrawal penalty may be avoided in the event of death or disability.
Non-retirement plan investments.
For homeowners, “stuff” just seems to accumulate over time. The same may be true for investors. Some buy investments based on articles they have read or on a recommendation from a family member. Others may have investments held in a previous employer’s workplace retirement plan.
Over time, they can end up with a collection of investments that may have no connection to their investment objectives. Because the markets are dynamic, an investment that may have made good sense yesterday might no longer make sense today.
By periodically reviewing what they own, investors can determine whether their portfolio reflects their current investment objectives. If they find discrepancies, they are able to make retirement planning changes that could positively affect their financial future.
For more insights and resources, be sure to sign up for our Weekly Market Commentary. Follow our YouTube channel where we regularly post our Epic Market Minute videos. Follow us on LinkedIn, or like us on Facebook. And as always, please don’t hesitate to reach out to a dedicated service professional at Epic Capital.
Tags: Certified Financial Planner Charlotte NC, charlotte NC, Current Events, Investing, Personal Finance
More Insights
Jul 26, 2024
Key Takeaways Volatility came back with a vengeance this week as selling pressure in the mega cap space dragged down the broader market. Counterbalancing weakness in these heavyweight names poses a challenge for the rest of the market. Overbought conditions can also be blamed for the recent weakness. The S&P 500 reached a 14.9% premium … Continue reading “Market Update – Assessing the Technical Damange”
Jul 24, 2024
Life insurance can be an excellent tool for charitable giving. Not only does life insurance allow you to make a substantial gift to charity at relatively little cost to you, but you may also benefit from tax rules that apply to gifts of life insurance.
Jul 22, 2024
When you think of Social Security, you probably think of retirement. However, Social Security can also provide much-needed income to your family members when you die, making their financial lives easier. Your family members may be eligible to receive survivor benefits if you worked, paid Social Security taxes, and earned enough work credits. The number … Continue reading “Social Security Survivor Benefits”
Jul 19, 2024
Information vs. instinct. When it comes to investment choices, many people believe they have a “knack” for choosing good investments. But what exactly is that “knack” based on? The fact is, the choices we make with our assets can be strongly influenced by factors, many of them emotional, that we may not even be aware … Continue reading “Making Investment Choices”
Jul 17, 2024
As a business owner, you should carefully consider the advantages of establishing an employer-sponsored retirement plan. Generally, you’re allowed certain tax benefits for establishing an employer-sponsored retirement plan, including a tax credit for establishing the plan and a deduction for contributions you make. In return, however, you’re required to include certain employees in the plan, … Continue reading “Retirement Plans for Small Businesses”
Top of Page
Services
Epic Capital provides the following comprehensive financial planning and investment management services: Learn More >
Find us on:
Copyright © 2024 Epic Capital Wealth Management. All Rights Reserved.
Securities offered through LPL Financial. Member FINRA/SIPC.
The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: CA, CO, DC, DE, FL, GA, IN, LA, MD, MO, MS, NC, NJ, NY, PA, SC, TN, TX, VA, VT, WA.