Financial foolishness

Are you foolish? I know that’s a provocative question. Nobody likes to appear foolish to themselves or to others. However, to paraphrase Forrest Gump’s mama, “Foolish is as foolish does.” We all play the fool sometimes, so it’s a good idea to engage in a little self-reflection occasionally to make sure we aren’t fooling ourselves. Self-reflection followed by self-correction enables us to grow wise despite our foolishness. As a financial planner I am especially interested in helping people escape financial foolishness. In my experience, there are three common ways in which people fool themselves financially.
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Roth IRAs for the Older Investor

Q: I retired last year. I receive a pretty good pension and I would like to contribute some of that money into a Roth IRA. Is that possible? A: You can only contribute what the IRS deems to be “earned income” to a Roth IRA. Unfortunately a lot of the income many retirees receive does not fall into that category. For example, the IRS specifically excludes
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Take a look at index annuities

Q: I went to a dinner recently hosted by someone who was trying to drum up interest in fixed index annuities. She said these kinds of annuities would allow me to benefit from the stock market’s upside while guaranteeing that I wouldn’t lose money if the market went down. It sounds too good to be true, but the products are offered by some very reputable insurance companies. What can you tell me about them?
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Inheriting a 401k

Inheriting a 401k

Q: My mother died earlier this year at the age of 69. She had been single for the past 25 years and had accumulated a significant amount of money in her company’s 401(k) plan. The 401(k) plan’s administrator says their plan requires that I take the money from the plan either in a lump sum or over the next five years. Which do you recommend?

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