J. Dishon Financial
Jamin's journey began in Richmond, IN, where his parents instilled in him his faith in God, the value of hard work and that anything you want to achieve in life is possible. His parents taught him that hard work, dedication to doing what's right, and having faith in God and oneself will help make any dream come true!
In 2002, Jamin graduated from Indiana University with a B.A. in Economics, but did not know exactly what he wanted to be when he grew up. His vision was to help people and their families more directly. During the last 10 years, he's had the pleasure of working with his true passion, Generation X. His "sandwich" generation faces insufficient retirement savings, worries about aging parents, concerns about kids' college choices and costs, and being the first generation to experience the paradigm shift from the "safety" of pensions to the uncertainty of 401ks and IRA's.
This experience ultimately led Jamin to create J. Dishon Financial, where he is able to tailor solutions based on his clients' concerns, be more transparent and develop deeper relationships with the families he serves. He focuses on areas of financial concern such as retirement planning (IRA's, 401k plans, and rollover consolidation), budgeting, college planning, wealth strategies, and protecting assets and families through life insurance.
Jamin is currently the radio host of "Everything Cha-Ching," and can be heard every Tuesday evening on WDJY 99.1 FM (WDJYFM.com) and has also been quoted in several media publications: Yahoo Finance, US News & World Report, and Self-Lender.
Jamin takes pride being in a position to help clients reach their financial goals and is blessed to fulfill his passion. J Dishon Financial is where goals are borne to succeed!
BA, Economics, Indiana University Bloomington
Great question! It is not as much about how an SIP is different from mutual funds, but rather, how they work together. SIP is a method of investing that takes a certain amount of your cash and invests it periodically into mutual funds. I am reluctant to use this as an example, but for simplicity and for the sake of visualizing, let's take a 401(k) plan. Instead of an employee making a one time deposit per year into their plan of $6,000, (and not being sure where to put it) they instead, systematically invest every pay period $250 (24 pay periods on a bi-weekly pay scale) into the mutual funds within the 401(k). That was a high level example, but hopefully that helps conceptually. SIP is just periodic deposits into mutual funds, where as mutual funds themselves are just baskets of investments (stocks and bonds).
I hope that helps.
Great question! Based on the information you provided, the primary reason you may consider adding bonds is to decrease your risk. Since I have limited information, I am going to assume you are fairly aggressive, based on the fact that you are retired and hold 50% of your 401(k) nest egg in your former employer's company stock (I will come back to that topic).
Now that you are retired, it would be advisable to first assess how much risk you are comfy with. When retired, one typically should decrease risk to preserve the nest egg during times of market decline. In most instances, retirees have less income (and time) to make up for losses than they once had during their prime working years. So, adding bonds to your portfolio may be a great idea for that purpose, however, it is important to know the best way to do that. If you are strictly referring to reallocating the money specifically in your 401(k), then you would want to look at the available bond funds that are provided within your 401(k) plan. You mentioned you currently have a stable fund, generally they allocate a decent proportion of the fund to intermediate and short term bonds. So you already have some bonds incorporated into your portfolio.
However, if you are referring to other money outside of the 401(k) plan and whether you should acquire bonds that way, then you have some additional options that aren't available in the 401(k) plan. You still have the ability to invest in bond funds, but you also can purchase individual bonds. Just keep in mind that these generally have long durations (10-30 year maturity depending on your bond choice), but can provide consistent income as well, and note, it is possible to lose money if you sell them in a rising interest rate market (but I don't want to get too technical).
Regarding your company stock, regardless of whether the company is a reliable dinosaur like P&G or an employer less stable, say "Mom & Pop Inc.," its generally a good idea to substantially decrease the percentage of company stock owned. I'm sure you have positive emotional ties to your former employer, I am sure they are a great company, however, 50% stake doesn't provide much diversification, your money isn't spread out as much as it probably should be. Not to evoke fear, but think Enron. Some of those employees and retirees would have decreased their losses had they possessed a lower proportion of their 401(k) nest egg in "dependable" company stock.
Lastly, it's a good idea to consider rolling your 401(k) into an IRA. Doing that gives you a lot more flexibility, additional investment choices (you aren't confined to only the investment options in your 401(k)), more control over your money, and it allows you to work with a financial professional, if you so choose. I hope this helps,
Congrats on starting a new and fulfilling career. Without knowing anything about your current financial situation, I would recommend establishing your emergency savings and 401(k) retirement plan.
Per the emergency savings, work towards accumulating a few months worth of your monthly living expenses in a savings account. In the event that some unforeseen occurrence was to happen (car repair, hospital bill), you have some cash set aside to address it.
As soon as you're eligible, start contributing to your 401(k). There will be a variety of mutual funds and fund families available within the plan to choose from.
Lastly, don't neglect life insurance. I am sure you have some coverage available through group insurance offered per your employer benefits package. But also, get a personal policy for yourself. You're young, so a decent size term policy and possibly a small permanent policy would be relatively inexpensive and you will grow into it as you get older.
I hope this helps. Congrats and best wishes!
I absolutely agree with the other responses, so the only thing I will add is that if you plan to stay with this employer for a while, don't overlook the company match if one is provided. If your employer matches and you qualify to receive those proceeds, then that is free money that you don't want to leave on the table. As long as you are contributing, they will contribute. So, review the investment options available within the plan and take advantage of the company match, if that's a provided benefit. I hope that helps you.
First of all, I tip my hat to you and your wife for doing such a great job so far. To only be in your late 40s and already own your home free and clear, kudos to you both! However, as you mentioned, the disadvantage to this is that you no longer have a tax shelter.
I will first state that I am not a tax professional, so you definitely would benefit from consultation with a CPA for more detailed tax questions (now that I've addressed that disclaimer). Both of you should absolutely consider contributing to your Traditional IRAs for the sake of potential tax deductions, dependent upon your incomes and how you file taxes.
For example, if you file your taxes "married filed jointly," then as long as your household income is $98,000 or less, you can take a full deduction based on the amount you contributed (max contribution per person is $5,500 under the age of 501/2). However, if you have the same filing status and your household income exceeds $118,000, then you are prohibited from taking any deduction, regardless of the amount you contribute (if this describes you, then you are better off continuing to max your Roth, because if there is no deduction now, you probably don't want to subject yourself to taxes later...here's where your CPA is beneficial). For clarity, you want to examine your Modified AGI and the method you file your taxes to determine exactly what you are eligible to deduct.
I hope this helps you. If you have any further questions, don't hesitate to reach out. Thank you.