The 5 Worst Ways to Save for Retirement – On Retirement

This article has some excellent ideas for managing your money and your life ….

Many of us should be ramping up our efforts to save for retirement.

But not all methods of saving money are worth the cost.

Here are five retirement saving strategies that could actually leave you worse off in retirement.

See the complete article here:   The 5 Worst Ways to Save for Retirement – On Retirement .

“I’m Building a Cathedral!”–The Role of Purpose in Motivation « Best Practices for Business

“A man came across three masons who were working at chipping chunks of granite from large blocks. The first seemed unhappy at his job, chipping away and frequently looking at his watch. When the man asked what it was that he was doing, the first mason responded, rather curtly, “I’m hammering this stupid rock, and I can’t wait ’til 5 when I can go home.”

”A second mason, seemingly more interested in his work, was hammering diligently and when asked what it was that he was doing, answered, “Well, I’m molding this block of rock so that it can be used with others to construct a wall. It’s not bad work, but I’ll sure be glad when it’s done.”

”A third mason was hammering at his block fervently, taking time to stand back and admire his work. He chipped off small pieces until he was satisfied that it was the best he could do. When he was questioned about his work he stopped, gazed skyward and proudly proclaimed, “I…am building a cathedral!”

“Three men, three different attitudes, all doing the same job.”

via “I’m Building a Cathedral!”–The Role of Purpose in Motivation « Best Practices for Business.

10 things to learn from Japan – Lessons from the Japanese Reaction to the Earthquakes

This is something that EVERY person in the rest of the world would do well to read. 

 If only people here would act the same way if we get the big one. The Japanese know something we don’t. 

  10 things to learn from Japan.

Not a single visual of chest-beating or wild grief. Sorrow itself has been elevated.

Disciplined queues for water and groceries. Not a rough word or a crude gesture.

The incredible architects, for instance. Buildings swayed but didn’t fall.

People bought only what they needed for the present, so everybody could get something.

No looting in shops. No honking and no overtaking on the roads. Just understanding.

Fifty workers stayed back to pump sea water in the N-reactors. How will they ever be repaid?

Restaurants cut prices. An unguarded ATM is left alone. The strong cared for the weak.

The old and the children, everyone knew exactly what to do. And they did just that.

They showed magnificent restraint in the bulletins. No silly reporters. Only calm reportage.

When the power went off in a store, people put things back on the shelves and left quietly!



How to find a Trusted Financial Advisor – 11 Criteria

The following criteria are from a post by Larry Swedroe and explain his approach to finding a trusted advisor: 

First, one should always make sure that you separate the functions of advisor/money manager, trustee, and custodian. Anyone who did that for example would have avoided the Madoff type problems

Second, one can find a trusted advisor by following these principles, requiring the firm to adhere to these 11 commitments.

NOTE: A Richer Life Financial Planning meets all 11 of these criteria.

1.Our guiding principle is that we will always do what is in the best interest of our client.
2.We provide a fiduciary standard of care— the highest legal duty that one party can have to another.
3.We are a fee-only advisor—avoiding the conflicts that commissioned-based compensation can create.
4.All potential conflicts are fully disclosed.
5.Our advice is based on the latest academic research, not on our opinions.
6.We are client centric—we don’t sell any products, only advice.
7.We provide a high level of personal attention—each client is assigned a team of professionals with which they will develop strong personal relationships.
8.We invest our personal assets, including our profit-sharing plan, based on the same set of investment principles, and in the same or comparable securities, that we recommend to our clients.
9.We develop investment plans that are integrated into estate, tax, and risk management (insurance) plans. The plans are tailored to each individual’s unique personal situation.
10.Our advice is always goal-oriented—evaluating each decision not in isolation, but in terms of its impact on the likelihood of success of the overall plan.
11.Our comprehensive wealth management services are provided by individuals that have the CFP, PFS, or other comparable designation.

Then you can check with, get references from, other respected professionals such as attorneys and CPAs as well as carefully reviewing the firm’s ADV.

I am pleased to say the A Richer Life Financial Planning meets all 11 of these criteria.

If you have any questions about this article or our financial planning services, please contact me via email at .

Why Roll Your 401k to an IRA?

When you stop working for a company where your 401k lives, you basically have four choices.

  1. cash out the money in the form of a distribution, on which you will pay income taxes and, if you are under 59 1/2, an additional 10% penalty. That’s almost always not a good idea.
  2. you can usually just leave the money where it is. Many employers will allow ex-employees to maintain accounts indefinitely.
  3. if you have a new job with a new 401k plan, you can transfer the money from your old 401k to the new one.
  4. (the best course of action for just about everybody) is to roll the 401k over into an IRA.

Why You Should Roll Your 401K to an IRA

Rolling over your 401k into an IRA is the best way to make sure that the money in those accounts in invested according to the best proven investing strategies (investing in a risk-appropriate, well-diversified portfolio of low-cost mutual funds which have a tilt toward small and value. And with an IRA rollover, you preserve all of the existing tax advantages of your 401k. Here are some of the benefits of rolling to an IRA:

1. More and Better Investment Options

In an IRA, you can select your own investments. You won’t be limited to the funds and managers selected by your employer. Consider that the average 401k employer plan contains just 13 investment choices making it difficult, if not impossible, to achieve a diversified portfolio whereas an IRA can give you access to thousands of investments, including stocks, bonds, CDs, and mutual funds.

(note: Among the investment choices that you will gain access to by rolling your 401k to an IRA are the funds from DFA. I believe strongly in the approach to inverting developed by DFA (Dimensional Fund Advisors). The vast majority of my personal investments are with DFA. Their approach is based on the best academic research by Fama and French, which resulted in the Three-Factor model of investment returns (the market factor, the value factor and the size factor). DFA Investment Strategies are designed to take advantage of these factors AND … DFA funds are almost never available in 401ks.

You can read more about DFA Funds at the DFA Page on my website –


2. Lower Fees

Under a 401k, the average annual administration fee charged to your account is 0.50 percent (Morningstar and Deloitte recently published a study that found that participants in employer-sponsored retirement plans paid administrative fees averaging 0.72% of assets. That’s on top of fund expenses (which, due to poor investment options, are often unreasonably high in a 401k to begin with).

These fees represent money that is being wasted and ,worse, this money isn’t being used to fund your investments. Most IRA rollover accounts do not have any administrative fee associated with them. This represents an immediate savings. In addition, because you can choose where to invest with an IRA account, you’ll get to take advantage of funds that typically have lower expense ratios than funds available through your 401k.

Note: A small reduction in expenses over the course of many years represents a significant savings. The average person retiring at age 60 should expect to have that money invested and growing for 30 years, or more. To demonstrate the power of lower fees, consider this: $500,000 invested at an 8% growth rate for 30 years will become approximately $5,031,000. If the return is eroded by higher expenses of only .5% (resulting in a 7.5% return, that amount drops to only $4,377,000 – $654,000 less (13% less money). This could have a significant impact on you standard of living during those thirty years.


3. Easier Account Management

With your retirement money earned from prior jobs in a single place you will have better visibility over your money and it will be easier to manage 

4. Easier Asset Allocation

With one account for consolidating your retirement assets, you’ll be able to more readily see the mix of investments in your portfolio and adjust the balance as necessary to stay on track with your retirement goals.


  • The biggest of several motivations for rolling your 401k is that you can then invest your IRA in almost anything you want to.
  • You avoid the hidden 401k costs and can select the best low-cost investments, resulting in higher returns and increased wealth.
  • It is also likely to make dealing with your investments a little simpler.

Here is an excerpt from another article addressing this subject:

If you leave a job, what you generally want to do is roll over your 401k into an IRA. And in this case, when I say “generally” I mean very nearly always. An IRA is basically the same as a 401k except that you can choose any investment you like rather than the short list available in a 401k, the fees are transparent, and the customer service is often much better.

Finding reasons why a person might want to stay in a 401k is not easy and quickly degenerates into a personal finance trivia game. The 401k might have access to special investment options not available IRAs belonging to the general public.

But even when added together these reasons can only apply to a tiny slice of the ex-employee population. If it is as much as 1% I would be surprised. For just about everybody there is nothing to discuss.

Roll your 401k into an IRA as soon as you can navigate your way through all the helpful folks trying to talk you out of it.

Generally, I tend to favor “it depends” as an answer to personal finance questions that many pundits answer with an unequivocal yes or no. But in cases like this, where the answer is a no-brainer for just about everybody, the answer is clear.

From Another Article:

I often harp on the point that one-size-fits-all personal finance advice is unwise, but this is one of those situations where a universal rule almost works. For most folks, there’s just not much to talk about. Search the web for advice on this and you won’t find very much because few writers think it is worth mentioning. A recent post on Smart Money’s sister blog The Wallet discusses a variety of issues surrounding 401ks if you are laid off and mentions, in passing and without discussion, that rolling over into an IRA is what most planners advise.

I’m in complete agreement. Get your money out of that 401k as soon as possible.

You can read a couple of other articles here: