Financial Literacy Tips and Information

Here's a little known fact in regards to group life insurance benefit. Most believe it is tax-free. But only the first $50,000. The difference is taxed as normal income.

Education never stops. When you stop learning is when you start dying.

The S&P 500 as of a few minutes ago year to date is down 21.01%. Have you checked your 401k/403b/TSP/IRA accounts? How much are you down? Can you afford to lose even more? Since everyone is telling you to wait until it comes back, how much time will you lose in earning by waiting? Can you afford to wait?

For my clients I helped who did not want the market volatility anymore (guaranteed no loss provisions), had a loss of exactly 0%. They are not worried at all what the market is doing. And when the market goes back up, they also gain.

For my clients' whose 401k/403b accounts I manage through their current company (company needs to be part of the program) and those that insisted on being in the market. The downside loss is around 8-9%. You can't prevent losses in these type of accounts, but you can mitigate them. Is it easier to make up a loss of 8-9% or 21.01%?

To put it into perspective. If you have a loss of 9%, in order to break even you need a return of 9.9%. If you have a loss of 21% you need a return of 26.6% to break even. And if you have a loss of 50% you need a 100% return to break even. Which one would you rather have? Who's account will recover faster and gain more over time?

What you don't know will hurt you. The more you learn the better your retirement and financial future will be.