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Oaktree Financial Advisors Blog

Lilly Adds Roth 401(k) Option

*Oaktree Financial Advisors is neither endorsed by nor affiliated with Eli Lilly

Effective January 1, 2012, Lilly will add a Roth feature to the current 401(k) plan. This new option allows you to contribute to your retirement savings with after-tax dollars. There are several reasons contributing after-tax dollars might be beneficial to you.

When you contribute after-tax dollars to your Roth 401(k), these assets will grow without being taxed. Likewise, when you withdraw these funds in retirement, they are not taxable.  You must have had the Roth account for five years and be age 59½ or older to withdraw funds without tax and penalties.

Keep in mind that the company match provided on the first 6 percent of base salary that you contribute to the plan, up to IRS limits, is taxable and will always go into the pretax portion of your 401(k).

This is a great opportunity for those whose income prevents them from making a Roth IRA contribution.  If you have questions or want to discuss whether this is right for you please give us a call

Even Seasoned Investors Can Fall Prey to Their Emotions

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Making investment decisions based on emotion can kill long-term performance.  It's very easy to get caught up in the day-to-day drama of the markets or some current crisis – it's human nature.  The latest version of a study that's done every year was recently released and the results once again show that average investors dramatically underperform both the market as a whole and the investments in which they are actually invested.1

Most Americans Don't Know Much About Their Pensions

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*Oaktree Financial Advisors is neither endorsed by nor affiliated with Eli Lilly

A Fidelity Investments survey released in July found that a majority of Americans do not understand how their pensions work.

While over 42 million Americans currently have pensions, 71% of the 500 surveyed by Fidelity did not have detailed knowledge of how their pension plans operate even though over half reported they are depending on those pensions to help pay for living expenses in retirement.

Calculating Your Retirement Needs

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Calculating a retirement savings goal is one of the most important steps investors can take to help determine if they are on pace to meet that goal. However, less than half of American workers have tried to figure out how much money they will need to accumulate for retirement and the wide majority of these individuals admit that they either guessed or did their own calculations.1 What about you?

Where's the Crystal Ball?

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To quote an article in Investment News "Following the advice of equity analysts may be perilous to your profits".

According to a Bloomberg study, stocks of companies that analysts liked the most rose 73% on average since the market recovery began in March 2009.  That seems great until you find out that the companies with the fewest "buy" recommendations gained 165%.

Too many so-called "advisors" focus on trying to time or predict markets or providing "market commentary" or "economic commentary".  As we have always said, the markets are unpredictable. This shows that accurate predictions are hard to come by.

Investments are subject to risk, including the loss of principal. Because investment return and principal value fluctuate, shares may be worth more or less than their original value. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results. Talk to your financial advisor before making any investing decisions