What is a 529 Plan?

Section 529 of the Internal Revenue Code provides for certain types of educational savings plans. These plans are operated by states or educational institutions, and as long as a plan satisfies certain requirements, it can provide certain beneficial tax features to those who participate in it. For many, these plans can provide excellent options to save for higher education needs for themselves, kids, or grandkids.

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When is the best time to begin saving for my child's college education?

As with just about any accumulation goal, the sooner you start saving to meet the objective, the easier it will be likely to get there. More time allows for the accumulation of compound interest, and it can provide a means for reducing volatility in the investment portfolio. These factors can help your money work for you, so you can more easily meet your goals.

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What is the difference between a 401(k), IRA, and Roth IRA?
Which should I have?

These are all types of retirement savings vehicles. Some of these can be offered by employers, while others are established at an individual level. The Internal Revenue Service sets forth rules that apply to these different vehicles. These rules dictate who can set up or participate in these accounts, how to maintain the accounts, and what the tax features or benefits are. Which type of retirement savings vehicle best fits your situation depends on a variety of factors, including, but not limited to, whether you or a spouse are eligible for a qualified plan through an employer, whether you are self-employed, what your household income is, and what your financial goals and objectives are.

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I have old 401(k) accounts from several different jobs.
Can I consolidate them into one account?

Generally speaking, you usually can combine 401(k) accounts from prior employers into an Individual Retirement Account (IRA). Some 401(k) plans also accept rollover assets from prior 401(k) plans. Thus, it also might be possible to consolidate old plan assets into a current employer's 401(k) depending on the terms of your current employer's plan.

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What is the difference between long-term disability insurance and
long-term care insurance?

Individual or group long-term disability insurance provides protection for earned income that is lost due to a disabling injury or illness. Some of the more important factors to consider in examining this type of coverage include how the policy defines the term "disability", how much of a benefit the policy offers in the event of a disability, whether the policy provides protection for partial disabilities, and for how long the policy will pay its income-replacing benefit. Long-term care insurance, on the other hand, can assist in covering costs incurred due to a long-term care incident. While these policies define their triggering events differently, they generally provide coverage when the insured needs assistance with some number of the activities of daily living, such as bathing, toileting, eating, transferring, and dressing, and/or if the insured has a cognitive impairment. Thus, instead of replacing lost income, long-term care insurance usually applies to assist in covering costs incurred associated with care.


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