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| May 1, 2006 | ||
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Money Wise: Financial Q&A
Q: What could I invest in that would offer long-term financial growth AND tax benefits? A: The first place to look is an employer-sponsored retirement plan. Plans such as a 401(k) will give you the ability to make tax-deductible contributions, lessening your tax burden today. The next place to look would be a Traditional IRA, which also allows for tax-deductible contributions. A Roth IRA gives you the benefit of tax-free withdrawals after age 59 1/2 in lieu of a tax benefit today. Investing in non-retirement accounts is a different story. Municipal bonds are tax-free, although growth potential is only moderate. Exchange-traded funds could be an answer. They are securities that track a specific stock or bond index, giving you broad diversification with low costs. The tax advantage comes from the very low turnover they incur, thus minimizing ongoing taxes fairly well. As with any investment strategy, make sure your portfolio's asset allocation gives you the desired balance of risk and return. You must consider what asset allocation will give you a desired expected rate of return, while still having potential downside volatility that you can remain comfortable with. Brian Watson, CFP Securities Offered Through ValMark Securities, Inc. Member NASD/SIPC. ValMark and Koss Olinger are separate entities. Answer to "Blackjack Trivia": A: Some casinos paid a bonus if a two-card 21 was made up of an ace and jack of spades. Others paid bonuses if an ace of spades was accompanied by a jack of either clubs or spades. The black jack was the key to the bonus, and became the name of the game. Prosperity Partners, Inc. www.prosperitypartners.com 800-868-6230 JasonR@ppicash.com
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| © 2006 Prosperity Partners | |
Electronic newsletter design and publication by IlluminAge Communication Partners |
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