Let’s say you’ve got your retirement savings figured out.

Meaning, you are currently automatically saving money each month through a 401K, pension, or IRA on a level that shows you’ll reach a comfortable amount of income producing savings by the time you retire.

Let’s also say that you do a good job of saving for annual Christmas gifts, a vacation or two, and a new car every five years. In other words, you don’t rely on credit cards to afford the occasional splurge.

Finally, let’s assume you have college savings headed in the right direction, as well as, adequate insurance coverage.

Now, you want to take your finances to a whole new level.

You want to start saving up some money to be used on a yet-to-be-determined long-term expense. Twenty or thirty years from now this money could be used to:

• give to your kids to be used however (e.g. wedding, house down payment)
• take the trip of a lifetime
• buy a vacation home
• buy farm land and livestock
• go back to school
• buy a boat or expensive car
• make a lump sum charitable donation
• start a business
• send your kids to a private university
• or whatever else you may just happen to want or need

Where do you put money that has no real, specific purpose yet (other than being deemed “long-term”)?

Before we get started, let me say I think it’s wise to have a specific savings goals for all your money. Saving just for the sake of saving, is a sign you might need to stop down and think about what you want for your future. Dream a little.

Okay, back to the question at hand. Let’s analyze this by looking at a few of the major factors: liquidity, return, and risk tolerance.

How liquid does this money need to be? Can you lock it up in an investment with penalties for early withdrawal? When it’s time to use the money, how long will you be able to wait access your money?

• Liquid assets include things like cash and savings (except certain CDs), stocks, commodities, and government bonds.
• Illiquid assets include things like real estate, non-government bonds, antiques, and business equity.

Knowing this money won’t be used for a long time means you can probably sacrifice some liquidity, but not quite at the level of your retirement savings. You don’t want to have to wait till retirement to use it (e.g. because it’s in a 401K).

What kind of return do you want? Are you expecting this money to remain at or above the level of inflation? Are you looking for huge returns through the power of compounding interest and earnings over the long-term?

• High-return assets traditionally include things like stocks, real estate, commodities, and business equity.
• Assets with a lower return traditionally, include cash and savings, and bonds.

Knowing this money is going to be held a long time, I think it’s important that it be able to at least keep up with inflation. This means you’ll need a minimal return of around 3-4%. At today’s savings rates, this leaves cash and savings (even CDs) as a poor option, at least for a majority of your nest egg.

What level of risk are you comfortable with? Do you need 100% protection for this money? Are you comfortable rolling the dice a little more with this money?

Risk typically correlates with rate of return. Thus, stocks, real estate, and commodities are going to be high risk, while cash and savings, and bonds are going to be low risk. Money in a FDIC insured account is virtually risk free (except for inflation risk).

Knowing this money doesn’t have a real goal attached to it, I would think it at least warrants a higher level of risk than you are willing to give to your retirement savings.

So what’s the answer?

The answer ultimately depends on your feelings about the above three factors. But traditionally, this long-term non-retirement savings has been invested in stocks and bonds using a taxable investing account (for the more passively inclined) and in real estate and business equity (for those who want to get their hands dirty and don’t mind being less diverse).

So, to get started in non-retirement stock investing, simply open up a taxable account at a discount brokerage (something like Vanguard.com or Betterment.com) and start automatically investing money into stocks, either directly into single stocks, or through ETFs, mutual funds, index funds, etc.

Don’t throw asset allocation and diversity out the window though just because of low returns in the cash and savings arena. Consider holding some of your nest egg back to place into cash and savings (online savings accounts work great or CDs), or as some have suggested, treasury notes and savings bonds.

At the end of the day it seems that long-term saving/investing (whether retirement or not) needs to be done mostly using the stock market. Do you agree?

Are you currently growing a non-retirement nest egg? Do you have any goals for this money?

Image by Vassilis Online

The Best Approach to Long-Term Savings (Non-Retirement): Building Your Nest Egg is a post from: PT Money: Personal Finance by PT.
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Do you want to own some Facebook?

Everyone and their grandma will be tuning in to the nearest stock ticker tomorrow, May 18th, to see what happens with the Facebook IPO.

Whether you think the stock is worth it or not, I think the attention is warranted.

It’s the most expensive Internet IPO in history and expected to be the most involved in terms of general public participation (because 900 million people use Facebook and “like it”).

How I’m Buying Facebook Stock

I’ve decided I’m going to invest in Facebook. I’m going to take a very small amount of cash and attempt to make a limit order for Facebook stock through my discount online broker. A limit order is a way to buy stock that guarantees you’ll buy it only if it remains at or below a certain price.

I won’t have access to the initial IPO price (because I don’t have millions of dollars and an account with Goldman Sachs), but by limiting my order I limit my risk of buying too high (at least in terms of the IPO price, which some have pointed out as way overpriced to begin with). So I may own stock in FB by the end of the day Friday, or it may take till next week for the price to dip back down to my limit and for my broker to pull the trigger.

My future plan for the stock is admittedly shaky at this point. I’ll be watching the price over the next few weeks and will consider a quick flip. I might also be tempted to hold for six months to a year. Who knows, I may end up keeping it indefinitely. This is the advantage of investing a small amount of money. It doesn’t really matter that much. I’m not retiring on this money.

You Shouldn’t Buy Facebook Stock…

Note that I don’t normally buy single stocks. This will be a first for me. I do 99% of my investing with my retirement in mind using index funds or low cost target funds in retirement accounts like the Roth IRA and 401k.

If you’re going to buy Facebook stock please don’t invest in Facebook stock with more money than you have to risk.

• I wouldn’t buy Facebook stock if I had consumer debt that I was still paying off.
• I wouldn’t buy Facebook stock if I had not met (or at least on track to meet) my retirement account maximum contributions for the year.
• I wouldn’t buy Facebook stock if I had short-term savings goals to achieve.

Basically, I wouldn’t suggest buying this stock (or any single stock) unless your financial house is very clean and you have some money to blow.

You Should Buy Facebook Stock…

If you are going to buy, then create a free account with an online discount broker and place a limit order so that you don’t purchase the stock when it’s at it’s IPO peak. Or, simply wait a few days and see what happens. If the IPO price is way over-priced then we’ll know soon.

As for Facebook’s long-term value, there are a ton of people saying that Facebook is not a good buy. Much of the negativity that I see revolves around the fact that Facebook has reached a peak from a user base standpoint. I would agree that it has reached that peak.

But I don’t believe it has reached a revenue peak. I have no reason to doubt that Facebook can find a way to make more money with the platform, while maintaining the non-commercial feel that people trust. Especially once public investor pressure is placed on the company. They were smart enough to build it and dominate. What’s stopping them from iterating on their position?

So when you combine the two factors (user dominance plus revenue potential), I see a big upside to this company. Of course, just because a company is strong it doesn’t mean the stock price will follow suit.

Still, the comparisons to Groupon.com’s IPO or MySpace.com are way off base. Facebook is not a fad, nor is it just the next best social media tool for the Internet. It is the Internet! It is completely entrenched in Internet culture and online business (think Facebook comments and Facebook Connect). When people go online, they go to Facebook.

Additionally, when I see people sharing anecdotal evidence about their experience (or lack thereof) with Facebook Ads as if they’re not effective, I have to smile. This makes it more clear to me that Facebook has a big upside in terms of finding a way to profit from their complete Internet dominance.

What’s your take? Will you be investing in Facebook stock?

Monday morning update: I ended up placing a limit order of $40 through Sharebuilder.com on Thursday at 4pm EST (per their recommendation). Before the release of the IPO, and before the market even opened, my order was mysteriously cancelled.

I’ve since called Sharebuilder.com and they cannot explain why the order was cancelled. I was travelling all day Friday and could not get online to execute another trade. Obviously, based on Friday’s performance and Monday’s results, I’m happy that the order did not go through.

The plan now is to wait for a few days before executing on a buy trade of Facebook (FB) stock.

First Time Investor Tips for Buying Facebook Stock is a post from: PT Money: Personal Finance by PT.
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This post is my contribution to the Financial Literacy Month blogger video project. See more videos shared by Steve at MoneyPlanSOS.

Everyone should know about the Roth IRA. I decided to sit down (in front of a camera…yikes) and answer 10 common questions about them.

Here’s my video, followed by the rough transcript.

1. What is a Roth IRA?

A Roth IRA is an “individual retirement account” or “arrangement” created by the U.S. Government with certain tax-saving features aimed at encouraging you to save more money on your own for your retirement.

2. Is a Roth IRA an investment?

No. A Roth IRA is an account. Not a specific investment. A Roth IRA is simply an account to put your investments, things like stocks, bonds, and cash.

3. How does a Roth IRA work?

A Roth IRA works in the opposit manner as a 401k. After you open a Roth IRA you are allowed to make after-tax contributions into the account and then choose investments. You can withdraw those contributions at any time.

However, since that money is typically invested and those earning are growing tax-free, the money you earn on your contributions generally cannot be withdrawn until you reach 59 and a half. The Roth IRA withdrawal rules can be complicated so be sure you understand them before getting started.

4. Who should open a Roth IRA?

A roth ira is a perfect for anyone just getting started with retirement investing who wants to pay fewer taxes on the money they use in retirement. They are also good for those who have a retirement plan through work (like a 401K) but want to make additional retirement contributions.

The Roth IRA is also good for anyone wanting more control over their retirement investing options.

5. Can you contribute to both a 401k and a Roth IRA?

Yes, in most cases this can be done. In fact, I would encourage you to do both if you have the choice. When I met the eligibility rules I was contributing the max to my 401k and then started contributing to the Roth IRA with my remaining dollars.

6. How do you open a Roth IRA?

There are lots of places to open a Roth IRA. I recommend you check out one of the discount online brokers or mutual fund companies (like Vanguard). The process is very similar to opening a savings account. Provide some basic personal information and fund the account with an initial deposit.

There is typically a “cash” type fund where you can hold your initial deposit while you decide on particular investments.

7. How much can you contribute to a Roth IRA?

The annual contribution limit changes each year, but in 2012 the contribution limit is $5000 per individual, with those 50 or older getting an extra $1000 added to their limit. There are also income limitations that you should review prior to opening an account.

8. What investments do you choose for your Roth IRA?

This is a very personal decision that should be based on your own tolerance for risk and understanding of basic investing concepts like asset allocation and diversification. I typically invest in low-cost target date mutual funds or some type of index mutual fund.

If you choose to open a “self-directed” roth ira you can invest in a number of different things, like real estate, peer lending notes, and even precious metals.

9. Can I rollover an old 401k into a Roth IRA?

Yes. As long as you’ve left the job, you can transfer funds directly from your 401k into a roth ira. Note that you will need to ensure that “direct” transfer takes place.

Also, note that you will need to pay the income taxes on the money you are transferring since the tax treatment of the money in changing.

10. Do you use a Roth IRA?

Yes. Both my wife and I have been using a Roth IRA for our retirement savings since about 2008. We’ve attempted to max out our accounts each year and we’ve kept the investments very simple by mainly investing in low cost target date retirement funds.

I love the security that comes with knowing we’re planning ahead and will be more prepared when we have to retire.

10 Quick Questions About the Roth IRA is a post from: PT Money: Personal Finance by PT.
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If you’ve been following my financial story on this blog for some time, you will know that I don’t really do non-retirement investing in stocks.

Nor do I do any single stock investing within my retirement accounts.

I’ve made this clear in several posts. And I mostly keep my investing category filled with posts about tax-advantaged retirement investing, information about mutual funds (because that’s what I know and do), and using Vanguard, the mutual fund company.

It’s boring, but I believe it’s all I need to do to build a solid retirement account for myself. Why do more than you have to, right?

But you can plainly see in my sidebar that I highlight the various discount online brokers (a place where taxable, more active trading usually takes place). I also roll out big promotions from these brokers from time to time. So an obvious question pops up: what would PT do with an online broker account? Here’s how the reader recently put it:

I was wondering if you could go more in-depth with ShareBuilder. I noticed you say you opened an account but then write about not investing individually. I feel the need to take advantage of testing out ShareBuilder with the ING Direct promotion, but feel rather lost about doing so.

My answer in steps:

1. I plan on doing a full ShareBuilder review at some point.
2. I only invest at ShareBuilder (or any online discount broker) if I’ve been given free money to do so.
3. I have bigger fish to fry with my earned income: retirement (although you could invest in an IRA with ShareBuilder, I choose to do it at a mutual fund company, Vanguard), debt reduction (it’s more important to me that I don’t have debt in my life), building a cash cushion, and diversifying into physical assets (like real estate).
4. If I was new to retirement investing and didn’t have enough money to start investing at Vanguard (their funds have minimums in the thousands), I would consider opening up a discount brokerage account and investing using an IRA. I would likely purchase shares in boring index funds or target date retirement funds to go inside my IRA.
5. When my income gets to a level where I am maxing out my tax-advantaged retirement savings options, I will consider the discount brokerage firm as a place to start single stock (likely dividend stock) taxable investing.

So, translation for anyone in the reader’s situation above: if you have a small amount to start investing for your retirement (or if you can only commit to a small monthly contribution), consider an IRA (Roth or Traditional) inside an online broker like ShareBuilder. You could also consider a similar move using the unique service offered by Betterment.

Investing account options with ShareBuilder.com

As for what to put inside your IRA with the online broker, well, that’s really up to you. Take time to understand the concepts of diversification, risk, and asset allocation. Lastly, take some time to understand the importance of keeping your investing expenses low. Most discount online brokers will have all the investment types you need though.

I definitely could use your help in answering this question. Do you use an online broker like ShareBuilder, TradeKing, or Zecco? If so, what do you use them for? If not, why?

Help a Reader: Why Use an Online Broker? is a post from: PT Money: Personal Finance by PT.
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This post is part of the #RothIRAMovement, designed to bring more awareness to the benefits of the Roth Individual Retirement Account or Arrangement (IRA). All credit goes to Jeff from GoodFinancialCents.com for starting the Roth IRA Movement and getting over 100 bloggers involved in this project.

Do you know about the Roth IRA?

Saving for your retirement is important.

You need to have money saved by the time you retire so that you can afford your expenses when you are physically and mentally unable to work.

When people talk retirement, the Roth IRA often comes up.

Rightfully so.

It’s an excellent tool to help you save more money for your retirement. I’ve used it in the past, in addition to my company’s 401K, to help me save for my own retirement needs.

Here are some characteristics of people who have a Roth IRA:

• They may be just getting started with retirement investing and looking for a place to put their savings.
• They may use a company 401K, but they are looking for an additional place to save.
• They want to save a lot of money on taxes when they withdraw their retirement savings.
• They want to have more control over their investment options and the investing fees they pay.
• They want more control over their retirement savings withdrawals (i.e. use the money for a first home, major medical emergency, etc.).

Sound good? If you’re wondering what a Roth IRA is and how it works, I’m going to try to answer that for you in plain English below.

First Came the Traditional IRA

To understand the Roth IRA, it’s important to understand it’s predecessor, the Traditional IRA. The Traditional IRA and the Roth IRA are both tax-advantaged places to hold your retirement investments. Meaning, there is some type of tax savings involved. The U.S. Government created them so that you’d be encouraged to save more for your own retirement.

With a Traditional IRA, you place pre-tax dollars into the account and you don’t have to pay taxes on the contributions or earning until you start withdrawing the money at 59 and 1/2. In short, with a Traditional IRA, you get a tax break now, but you have to pay taxes on the earnings from the account when you retire and start cashing out.

This is almost identical to the way a 401K works. The major difference is control. With a 401K you are at the mercy of your employer’s choice of funds and expenses. With a Traditional IRA (as well as the Roth), you get to decide where to open the account, what to put in it, and if you want investments with low costs.

The Roth IRA Flipped Retirement Savings On Its Head

The Roth IRA is taxed just the opposite of the Traditional IRA and 401K. You place after-tax dollars into the account, and you don’t pay taxes on the contributions or earnings EVER, as long as the money is taken out in what is called a qualified withdrawal.

Because this account is so great, the government decided to put limits on it: both the amount of contributions that can be made each year and the amount of income a person can make and still contribute. In short, you can’t put an endless amount of money into the account and rich people need not participate. Be sure to review the contribution and income limits in more detail before starting up a Roth IRA.

It’s important to stress the concept that IRAs are simply places to hold your investments. They are not investments in and of themselves. You have to put something in them. Most people put some combination of stocks, bonds, and cash in their IRAs.

One last note about the Roth IRA: you have to go out and open one up for yourself. Your employer won’t do this for you. But this isn’t a negative. It’s a positive feature. Because you have complete control, you can decide where to open your Roth IRA, what to invest in, and you’ll never lose the ability to contribute if and when you change jobs.

Steps to Making the Roth IRA Work for You

So now that you have the basic concepts down, let’s look at the steps to making a Roth IRA work for you.

1. Decide if you want to invest for retirement using a Roth IRA. In can be used in addition to, or in place of, a company 401K.
2. Determine if you are eligible for the Roth IRA based on the income limitations.
3. Open up a Roth IRA with a mutual fund company or discount broker.
4. Decide what investments you want in your Roth IRA.
5. Start making after-tax contributions to those investments within your Roth IRA.
6. Continue making contributions as long as you want and are eligible.
7. When you’re ready, start withdrawing funds tax-free.

Hopefully this post gave you a good idea of what the Roth IRA is and how it works. At the risk of repeating myself, it’s really a great tool to help you save much more for your retirement than you normally would. Taxes can really eat into your investment earnings. If you can take taxes out of the equation then you’ll be able to keep a lot more of your hard earned money.

If you’re looking for a good video explanation of the Roth IRA, look no further than this gem from Kevin @ Thousandaire.com:

Have a question about the Roth IRA? Fire away in the comment section below.

What is a Roth IRA and How Does it Work? [In Plain English] is a post from: PT Money: Personal Finance by PT.
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In recognition of the upcoming deadline to contribute to your 2011 Roth IRA, the #RothIRAMovement, and just to have some fun, I’m partnering with several other bloggers and IRAMarket.com to giveaway $5,000.

Yes, $5,000!

If you win, you can actually use the money for whatever you want. But a Roth IRA is a great tool (probably the best) to help you save for retirement, so this will help you kick start one in style.

If you’re 50 or older, the winnings are bumped up to $6,000 (to reflect the “catch-up” contribution limit).

Joining with me in this giveaway are the following sites: Good Financial Cents, Christian PF, Budgets Are $exy, Cash Money Life, and Gen X Finance.

This Sweepstakes is open to legal U.S. residents of the continental United States and Washington D.C., who are eighteen (18) years of age or older at the time of entry. Giveaway ends on Sunday, April 8, 2012 at 11:59:59 p.m. ET. Read the complete official rules.

To enter the giveaway, (1) do all the “likes” and “follows” below, and then (2) proceed to the giveaway page at IRA Market’s Facebook page to complete the form for entry.

(If you don’t see the entry form above, be sure to view from PTMoney.com or go direct to the IRA Market Facebook page.)

Good luck!

The Roth IRA Movement and $5,000 Roth IRA Giveaway is a post from: PT Money: Personal Finance by PT.
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Every day someone leaves a job and asks, “should I rollover my 401k?”

Most of the time, the answer is yes.

If you recently left a job, you should probably rollover your 401k.

But there is more than one way to answer this question if you look at it closer. The answer really depends on where you are rolling over that 401k to.

There are many places to put your old 401k funds. You could roll it over into your checking account, a new 401k, a rollover IRA, or even a Roth IRA.

Let’s review each of these moves and answer the question using each location.

Should I Rollover My 401k to an IRA?

The 401k rollover to IRA is the most common type of rollover. You know that commercial with the little green line? This is the type of rollover they are referring to. You take your money from your 401K and put it directly into what’s called a Rollover IRA.

It’s a specific type of traditional IRA where you can stash your old 401k funds. What’s great about this move is that there are no penalties, no taxes, and if you use the right broker, you get a lot more control over your money with much few expenses than if you left the money in your 401k.

Note that even though this is the best way for most people to rollover their 401k, there are some reasons not to do a rollover, as Mike from Oblivious Investor points out.

Should I Rollover My 401k to a New 401K?

When you leave a job, you are most likely headed to a new one, where you’ll start up a new 401k account. It’s tempting to want to roll your old 401k into your new one. You can do this. And this may be right for you if your ultimate goal is simplicity.

In general though, 401k’s give you much less flexibility and control than an IRA. Therefore, With less flexibility and control you’ll be less likely to ensure that your funds are being invested according to your needs.

This isn’t a bad move, but in my opinion, it’s not the best.

Should I Rollover My 401k to a Roth IRA?

You can now rollover your 401k directly to a Roth IRA. But because Roth IRAs have a different tax treatment than 401ks and traditional IRAs, you’ll have to pay taxes on the rollover. Don’t let this necessarily scare you away from this move. Roth IRAs have a huge benefit when it comes time to retire.

Study the difference between a 401k and Roth IRA to help you understand if it’s worth it to do a direct rollover to a Roth IRA from your 401k.

Should I Rollover My 401k to Cash?

Unless you are in dire straits you should not rollover your 401k into cash. By doing this you will essentially be taking an early withdrawal. You’ll face a tax penalty from the IRS and you’ll also have to pay taxes on the money.

If you receive a check from your old employer for the proceeds from your 401k, be sure to roll it over to an IRA, new 401k, or Roth IRA as soon as possible.

In conclusion, it makes sense to rollover your 401k after you leave your job. Just make sure you roll it over to the right place.

Do you have an old 401k you have yet to rollover? What’s holding you back?

Should I Rollover My 401k? is a post from: PT Money: Personal Finance by PT.
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“During these hard times, what would be the best investment you could do with your money to make it grow bigger: money market account, CDs, or a high-yeild savings account?”

That was the question I recently received from a reader. Let’s discuss the question and the surrounding issues.

Savings vs Investment

In some ways, saving is investing. But for the most part, and definitely in the sense it’s being used in the question above, saving and investment are two different things. If you are expecting savings to “grow bigger”, especially in our current banking scene, then you are going to be waiting a while. Or worse, you’ll lose money.

Savings rates are by default lower than investing rates. Classic risk-reward. But since the Fed is keeping interest rates down at really low levels until late 2014, savings rates are going to remain significantly lower (between 0% and 1%) than we’ve seen in the past.

In the past, you could expect savings rates to remain at, or slightly above, inflation rates. Have you looked at inflation rates recently? Back in 2009 and 2010 they correlated nicely with our low savings rates. Not anymore. The inflation rate is back up around 3%. Unfortunately, savings rates didn’t follow.

Some argue that because savings rates are low, credit rates are low, saving us all money on things like mortgages, re-fi’s, car loans, student loans, etc. Not to mention, supposedly keeping the banks (and all of us who depend on the system) from imploding. With inflation rates back up, it’s hard to swallow that argument. It plain sucks for savers these days.

Using MMAs, CDs, and Savings Accounts

These financial products, even with their dismal savings rates, are still a good option for certain situations. They provide liquidity (as long as you use no-penalty CDs) and protection (via FDIC). For many short-term savings goals, like an emergency fund, these tools still make sense. But they aren’t going to grow your money anytime soon.

Some have turned to high-yield reward checking accounts as an alternative to the savings account. These rewards checking accounts can pay up to 4% interest on a limited balance (typically around $20,000), plus you have to perform certain transactions to ensure you are actually using the account. At 4%, it’s looking like this is a smart move, and has been for the past year.

Another way to keep up with inflation, as someone recently suggested in this Ask.Metafilter thread, is to invest with I Savings Bonds from the U.S. Treasury. These currently pay around 3%, but you have to keep the bond for a year. If liquidity is not an issue for you, then this may be a good option.

But to really “grow” your money these days, you’ll have to put it at risk.

Grow Your Money by Investing

I’m putting my money into my retirement accounts and investing in a target-date fund. That’s how I’m making it grow, and that (investing in stocks and bonds) is pretty much the standard line you’re going to hear across the personal finance blog-o-sphere.

I also hope to invest some of my excess money in a rental property (converting our current place) in the next few months. Additionally, I’m always on the lookout for new business opportunities to invest in. If I was in a State that allowed me, I would probably look into doing some investing into the peer-lending industry.

What about you? What are you doing to grow your money? What are you using your high-yield savings account for?

Image by 401Kcalculator.org

Where Should You Save and Invest Between Now and 2014? is a post from: PT Money: Personal Finance by PT.
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The revolutionary personal investing service Betterment just improved their offer.

Today they are announcing a new, lower pricing structure ranging from 0.15% to 0.35%.

They are also introducing IRAs, giving you the ability to use Betterment as a full-fledged, tax-advantaged retirement account.

Here are the details.

Fees – Betterment used to charge 0.3% to 0.9%, depending on your account balance. Now they are charging from 0.15% to 0.35%. They categorize their fees based on the type of user you are: “Builder,” “Better,” and “Best.” Here’s the visual:

At a flat 0.15%, Betterment is competing with the low-cost ETFs you would get from companies like Vanguard. It actually rivals my low-cost target date fund. This new pricing essentially cuts the old model in half, and then some. Kudos to Betterment for making their service more affordable.

Note that the minimum balance still drives the rate, but it also entitles you to some other services: next-day transfers and a custom portfolio. I was told by the Betterment team that if you want these additional services, but don’t qualify based on your balance, you can pay a monthly fee in lieu of the fees above to get them.

A couple of other things to point out: for the first 30 days under Betterment you can get the account for free; also, existing customers can stay put in their old pricing plan if they want to.

IRAs – Existing customers have known about this for a few months. But now as a new customer to Betterment, you can come on-board starting with an IRA (both Traditional and Roth). This means you can also rollover your 401K or existing IRA to a Betterment IRA.

In my book, adding the ability to invest with an IRA through Betterment is huge. As you guys know, I don’t see much use for taxable investing. So this is a welcome change for me.

If you read my in-depth review of Betterment, you might remember that two of the negatives that I mentioned were pricing and no IRAs. With these new changes they’ve dramatically improved their service, making it worthy of a second look if you’re looking for a place to start investing or rollover an account.

Note that Betterment is still offering a $25 bonus to new accounts opened with at least $250.*

What do you think of the changes Betterment is implementing? Would you be more apt to try their service, given the new IRAs and pricing?

*Accounts must remain active for at least 60 days.

Betterment Gets Better: IRAs and New Pricing Structure is a post from: PT Money: Personal Finance by PT.
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"Invest? No thanks!"

Medicare is faring even worse.

Projections claim that it will be unable to pay medical expenses by the year 2024.

Retirement isn’t looking as comfortable as it did twenty years ago.

Today’s young and middle-aged adults need to be planning for the future.

They need to be saving and investing their money to ensure a long and comfortable retirement.

Why then are so many people ignoring these statistics and not investing their money? Research has provided a number of reasons why. Some of those reasons can be negated through a little time and effort while others may take a different approach to overcome.

1. Lack of funds due to overspending. Many people feel they need to spend 100% of their income for one reason or another. Whether they are happy to have an income or they are compulsive debtors, it appears that there are those individuals out there who spend what they make.

2. Lack of funds due to low pay. Many individuals find themselves unable to invest due to a low income. The whole of their net pay may be going to provide food, clothing and shelter with very little left over for investing.

3. Lack of education. Education in investing is not easily available. Most schools are not including it in their high school curriculum and college only offer those types of classes to business majors. Where does the average person go to find the education? How does the working class person, who has skipped college, find a source for investment education? Can everyone afford their own money coach?

4. They do not trust strangers with their money. With cases like Enron in the news for the past few years, many people have grown leery of using a brokerage to invest their money. They fear for corruption.

5. Uncomfortable with the risk. When you invest your money in the stock market there is a level of risk involved. The higher the risk, the greater the reward, typically. However, many people feel that avoiding the (potential) loss is a wiser decision than the possibility of a rewarding payout.

6. Focusing on debt reduction first. Paying down debt in order to free up more money for investing is a good idea. However, if you have an employer offered 401K with a match, be sure to invest up to the match. Even while paying down debt, you do not want to lose out on the “free” money that is being offered to you.

7. Don’t believe a small amount of money makes a difference. Some people do not invest their money because they believe that what little they can put aside will not make a difference. When, in fact, a small amount can make a big difference.

8. Avoiding the future. For one reason or another, many people choose to avoid the future. They do not plan for it nor do they take the necessary steps to ensure that it is full of the life they want it to have. It could be due to fear, severe procrastination or laziness. Whatever it may be, avoiding the future is going to harm them in the end.

With investing there are just a few things to remember. First, the sooner you start, the better. In fact, consider opening a Roth IRA for your child to help their future become financially stable.

Secondly, start investing with a small amount (Even if you can only invest $25 a week.) now if that is all you can afford. As it grows, reinvest it. Each time you do, the amount you are earning on your return grows, as will your portfolio.

And finally, if you have thought about your future, and you are concerned about how it is going to play out, seek out the information you need. The internet is a wonderful place to learn information. It is an excellent starting point with low risk and little intimidation.

Investing can be simple to do, and with a little research you can find a reputable online stock broker to handle your investments to help them grow even quicker.

This article was written by Jessica at Everything Finance. Everything Finance is a site about just that, everything related to finance. You can get information about investing, saving money, shopping, blogging, and making money online.

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8 Reasons We Choose Not to Invest is a post from: PT Money: Personal Finance by PT.
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