Another thought provoking article by Ernie McDaniel

That depends. There are several possible reasons to move your retirement money to an IRA but there may be an overriding reason not to do so for part of it.

This decision is mostly about avoiding taxes as long as possible and as much as possible for both yourself and your heirs. This isn't a minor issue. The right decision may mean several times more wealth ultimately distributed to yourself, your spouse and your children.

Another thought provoking article by Ernie McDaniel

Years have passed since I last discussed in any column a stress-relief financial product that I now believe may be particularly appropriate for this strange time.

I will share the product name in a moment, but first let's talk briefly about “this strange time”. This is a time when the popular media and many investors seem optimistic about the stock market while respected gurus Bill Gross, John Mauldin, Jeremy Grantham, and others are very much the opposite to optimistic.

I too have an opinion about the market. Whenever someone asks, as they often do, which way I believe the stock market will go, my stock (forgive the pun) answer is “up and down”. That usually brings a chuckle, but I mean it seriously.

Another thought provoking article by Ernie McDaniel

Don't be afraid for America. She will survive, just as she survived the Depression and many recessions. But average Joes and Janes may suffer a good deal in the future if things don't work out as well as we all hope. That's why you may want to be especially cautious with your personal retirement nest-egg.

Economics is a difficult science…if it's a science at all. There are as many different opinions about the future of the economy as there are economists to offer them. George Bernard Shaw once commented that if all economists were laid end to end, they still wouldn't come to a conclusion. To the best of my knowledge, he didn't recommend shooting them first but he might have preferred that.

Another thought provoking article by Ernie McDaniel

You're right, “annuity” may have different meanings to different people and in different contexts. Sometimes it is shorthand for “immediate annuity” and sometimes for “deferred annuity”. Big difference!

An immediate annuity is an arrangement where someone agrees to pay someone else on a regular basis, monthly for example, a certain amount of money for an extended period of time. This extended period may be specified, for example, ten years, or it may be for the lifetime of the payee, an unknown period of time but nevertheless actuarially predictable. The period may even be for as long as either of two payees is living, which is also actuarially predictable.

Another thought-provoking article by Ernie McDaniel

In my book Three Miracles and Seven Secrets, the chapter on the first of the seven secrets is titled “The Danger of Denial and the Price of Procrastination”. This is a secret that needs to be told, so bring your ear close as I whisper.

You probably already know this first part. Human beings are remarkably adept at disbelieving when they prefer not to believe, at being struck deaf when they prefer not to hear, at succumbing to distraction when they prefer not to think.

Here is the good news. Experts tell us that people mildly out of touch with reality in the direction of optimism are happier than those who are more accurate in their assessment of probable events.

Another thought-provoking article by Ernie McDaniel

Not understanding bonds can be dangerous to your financial health. That danger looms darker than ever in times of stock market uncertainty and low interest on certificates of deposit, because retirees are searching for alternatives to these otherwise commonly used long-term financial vehicles.

What is a bond? Generally, it is a loan of money. To a corporation. Or to a government institution, possibly federal, state or local. Generally, the loan is for a specified number of years, with a promise of interest payments at a fixed rate until the principal is repaid in a lump sum at the end of the period. Again, when you buy a bond you are making a loan at a fixed rate.

Another thought provoking article by Ernie McDaniel

Avoiding probate (succession) is quite doable. It only takes a little planning.

Let's understand from the beginning what probate is and what it is not. It has nothing to do with federal estate taxes or state inheritance taxes, even though these also occur as a result of death. Probate's purpose is a fair and timely transfer of ownership of assets from the deceased to the appropriate survivors, making certain that creditors' rights are respected as well.

Another thought provoking article by Ernie McDaniel

We don't always get what we deserve. You've known morally or mentally challenged people, or just danged lazy, who always seem to come out smelling like a rose. You've known smart and honest and hardworking people who just can't seem to get a break. So, not every person who has a debt problem brought it upon himself. Sometimes it's a lawsuit that causes the difficulty, sometimes overwhelming medical bills. Sometimes it's a partner or spouse, sometimes a worthwhile business venture turned nasty. No matter what the cause, it's good to know how to protect your assets.

Another thought-provoking article by Ernie McDaniel

You’re in a car hurdling along the highway at seventy miles per hour, with your spouse driving, when he suddenly cries out, releases the steering wheel, clutches at his chest with both hands and dies instantly before your eyes. Question: Do you wait the commonly recommended one-year grieving period after a spouse’s death before you decide to grab the steering wheel and operate the brake?

Another thought provoking article by Ernie McDaniel

I have received a number of inquiries on this subject since I mentioned it a few weeks ago in an article about controlling insurance costs in general. Before I answer, let me make sure the reader knows what long-term care insurance is and is not.

A thought provoking article by Ernie McDaniel

There are potential advantages (and disadvantages) to both strategies. Which is the better choice may depend on your personal circumstances.

Advantages to paying off a mortgage and owning your home free and clear include:

Another thought-provoking article by Ernie McDaniel

“Lies, damned lies, and statistics” is a comment on the abuse of statistics I have over the years heard attributed to Disraeli, Twain and even Truman, but no matter how many people may have said it, or of what great fame and authority, or how often, it is no more true -- and no less. Truth is not democratic. Truth just is. In our blessedly democratic American culture, however, folks tend to believe that which they hear most and in the most places. And they do truly hear certain statistics repeatedly, including stock market return statistics, for example. Can these statistics be, as the quote suggests, the worst of lies?

Another thought provoking article by Ernie McDaniel

We all strive to maintain a sense of peace in our lives. We want the comfort of the known. If we are wise, though, we realize that improvement involves change and change involves the unknown. In these uncertain times, a choice for change is all the more frightening…and all the more vital.

One cannot negotiate a winding and perilous mountain road by gripping the steering wheel in panic and hoping the way will straighten soon. Yet it is with that fearful, frozen grip that many people guide the destiny of their retirement nest-eggs. Want to stomp on the brakes, come to a dead stop, wait for a new road to be built? Impossible. The world does not wait. Inflationary and deflationary forces do not. Dangers do not. Neither do opportunities.