New on SaveAndInvest.org
AutoPilot Investing with the TSP L Fund
A little over a year ago, the Thrift Savings Plan (TSP) began offering "lifecycle funds" as a choice for those interested in saving for retirement through the federal government's retirement savings plan. Some 75,000 members of the uniformed service (and 300,000 total federal government employees) invest in the TSP's lifecycle or L Funds. They offer a number of benefits—but it's important to know what you're getting into before you invest.
In this article you'll learn:
- What a lifecycle fund is—and the different fund choices available through the TSP
- How the TSP L funds work, and how your investments change over time
- How to get started investing through the TSP
Read the Article. For more resources to help you plan for retirement, visit our Tools and Calculators page.
Home Front
Adjustable Rate Mortgages
Adjustable rate mortgages (ARMs) may have low rates only for a short time. This means that the interest rate and the amount of the monthly payment may go up or down. The Federal Reserve Bank, a SaveAndInvest.org partner, explains what an ARM is and offers advice on how to avoid making a bad loan decision. Learn more.
Closing Costs
Mortgage settlement—sometimes called mortgage closing—can be confusing. This Guide from the Federal Reserve Bank can help. Read A Consumer's Guide to Mortgage Settlement Costs.
Deployment To-Do List
Have You Made Your Family Financial Checklist?
Even if you are not shipping out immediately, start preparing your family financially by making a list of questions and issues, or by using the Family Financial Checklist. Check off issues as you learn about them and write notes on your findings. Start your checklist today!
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Investor Alert
Look Before You Leave: Don't Be Misled By Early Retirement Investment Pitches That Promise Too Much
Early retirement is an alluring prospect. When faced with a pitch that promises that you can cash in your retirement savings in your 50s, reinvest the money, and live comfortably off the proceeds for the rest of your life, many simply can't say no. But usually they should. NASD is issuing this Investor Alert because it is aware of instances in which employees who had built up sizeable retirement savings have been misled, and financially harmed, by flawed, even fraudulent, early-retirement investment schemes.
Be extremely skeptical if you hear comments such as the following:
- Everyone can retire early! The reality is that not everyone has the resources to do so.
- You can make as much in retirement as you can by continuing to work! Promises like this usually hinge on unrealistically high returns on investments and unsustainably large yearly withdrawals.
- You can expect returns of 12% or more! Any return over 10.4% exceeds the historical long-term returns for the stock market (assuming all dividends were reinvested rather than spent)—and no one can predict returns from one year to the next.
- You can withdraw 9% or more and never run out of money! Unless you have substantial retirement assets, withdrawing this amount can lead to rapid depletion of your principal, and even smaller withdrawal amounts may cause you to outlive your retirement assets.
Read the Alert.
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