Contributions for employees must be made within 30 days after a pay-period, while employers may match any time before their tax filing deadline. Salary reduction contributions to a SIMPLE IRA must be made no later than 30 days after receiving the paycheck in the calendar year that reflects their deferral. Employer contributions can be made each pay period, but they must be made by the same due date as their tax-filing deadline. This can be the extended deadline. Continue reading...
Yes, you can start receiving social security benefits before you actually stop working, and your benefit amount will not be affected if you have attained normal retirement age, or NRA, which is determined based on the year of your birth. NRA is 67 for most people today. If you start to take benefits while working and before the normal retirement age, your benefit will be reduced. But there are a few caveats to consider if you start to receive the benefits before your normal retirement age. Continue reading...
An Irrevocable Trust is one in which the grantor (the person who creates and funds the trust) cannot modify the trust once created. An irrevocable trust can only be modified or terminated if the beneficiary of the trust authorizes such changes. An Irrevocable Trust allows you to name a Trustee (the person that will handle your assets and will oversee their distribution to your heirs in the event of your incapacitation or death) and define the terms and conditions of the Trust while you’re alive. You can name yourself as the Trustee so you can manage your assets while you’re capable of doing so, and name a secondary Trustee to take over when you’re not. Continue reading...
Homeowners insurance covers a variety of risks to a homeowner, including damage to the property and the belongings within it, as well as liability coverage in the event that someone else is injured on the property. It does not include coverage for flood or earthquake damage, so people living in areas where that might be a problem will need to find a separate policy for those coverages. Homeowners insurance is highly advisable for any homeowner, and most mortgage lenders will require it. Continue reading...
Unsystematic risk is idiosyncratic or unique risk that does not reflect a direct correlation with the risk present in the market, or systematic risk. Most securities and portfolios experience risk and variations which are not attributable to the market as a whole, and this is known as unsystematic risk. Systematic risk, on the other hand, is the risk borne by all investors in the market, where broad changes in the market cannot be avoided through diversification of a portfolio. Continue reading...
The Federal Housing Finance Association is the Conservator of Fannie Mae and Freddie Mac since the 2008 meltdown. The FHFA was established as an independent government entity to oversee the secondary mortgage market. The FHFA is a regulatory agency which took over for the Federal Housing Finance Board and the Office of Federal Housing Enterprise Oversight (OFHEO). It was created in 2008 by the Housing and Economic Recovery Act (HERA), and it oversees the operations of Freddie Mac, Fannie Mae, and the 11 federal home loan (FHL) banks. If you’ll recall, Fannie Mae and Freddie Mac provide liquidity to banks and transfer risk from them by buying their mortgage cash flows from them. Continue reading...
The FERC oversees the interstate commerce surrounding oil, energy, and natural gas. This regulation and oversight might deal with pipelines and storage facilities, permits for future exploration sites, environmental and safety concerns with projects, as well as the sale and transfer of these commodities. FERC deals with the companies engaged in the extraction, transfer, storage, and sale of energy and energy-related resources. Continue reading...
If a central bank takes actions that intentionally and artificially affect the value of a currency, particularly its own, it is engaging in what is known as a Foreign Exchange Intervention, or an interventionist policy. Central banks occasionally use interventions in foreign exchange markets to achieve a desirable end. The banks will intentionally make trades and hold certain amounts of currencies or derivatives with the sole purpose of manipulating the value of their domestic currency. The reasons for that manipulation might be to slow down inflation or to make their county’s exports look more attractive by pushing the value of their currency lower. Continue reading...
A Limit Order is a type of order to buy or sell a security, where the trader wants to set a specific price for the trade, or any price that’s better than the price set. From a buy and sell standpoint, a buy limit order would be designed to have the trade executed at the designated price, or any price lower than that. A sell order is just the opposite, where the trader hopes to execute the trade at a minimum set price. Limit orders typically have a period of time before they are canceled, if the designated price is not reached by a certain period. Continue reading...
Active management is the practice of attempting to outperform the market with selection and timing. Active management is a thoughtful and time-consuming approach to investing and is the opposite of Passive management. Active managers seek to outperform the benchmarks for their portfolio by researching and selecting stocks and other assets based on strategies and analysis methods thought to be superior. Continue reading...