Can your IRA be tapped before retirement?

Anyone who has contributed to an Individual Retirement Account is likely aware of the plan’s primary restriction – namely, that you cannot withdraw the money until you reach the age of 59 1/2.

At the same time, the government didn’t want this restriction to be too onerous, so rather than making it impossible, they simply decreed that if you do so, you will incur – on top of the taxes owed on the earnings that have accumulated – a penalty of an additional 10 percent. This was considered to be sufficient to discourage most taxpayers from arbitrarily raiding their retirement savings prematurely, while at the same time allowing it to be used as a safety net for those undergoing financial stress when younger.

Is the yield curve signaling a recession?

Graph courtesy of Federal Reserve Bank of St. Louis
Financial experts at the Federal Reserve Bank of St. Louis chart the difference between two- and 10-year bond rates to predict whether a recession is imminent.

You may have heard through the financial media that the U.S. Treasury yield curve has been flattening, portending a possible recession in the near term. As of this writing, the yield curve is at its flattest point since 2007. Exactly what is the yield curve, and is it truly a good indicator of a future economic downturn?

The Treasury yield curve is, simplified, the difference between the current two-year and 10-year U.S. Treasury bond rates. Ordinarily the two-year rate is lower than the 10-year rate, resulting in a positively sloped curve if you were to graph it. It is a function of the time value of money. If you buy a 10-year bond, you are lending money to the government for 10 years, hence the demand for a higher return as compared to only a two-year loan.

One simple way to deal with financial fraud



There seems to be no letup to the reports about fraudsters attempting to fleece unsuspecting investors out of their savings. I find it especially egregious when they target seniors who have a limited ability to recover. Below I offer the one piece of advice I believe is easy to follow and will at least help mitigate the damage.

But first, here’s a rundown of some of the latest scams to come to my attention.

Why do clients pay for advice they don't take?


My line of work can be described as someone who is paid to learn, someone who is paid to give advice based on what he’s learned and someone who argues for a living. As a lawyer, in the game of life, I inherently know many of the rules and clearly know how to find them. I am literally an expert, and people pay for my advice.

Back in the last century, before we all had access to computers and the internet, a lawyer was pretty much just a lawyer, and often wore many hats. Our society did not have as much in the way of segmentation and specialization as we see today. It was rare 60 years ago to hear the question, “What kind of law do you practice?” A lawyer back then was essentially a Jack or (rarely) Jill of all trades. Many attorneys would handle both civil and criminal matters.

Health Savings Accounts offer an underexplored triple benefit

Health Savings Accounts are an often misunderstood and ignored retirement savings option. They are often confused with the Flexible Spending Accounts some employers offer, which have limitations and are different from HSAs.

Easiest way to avoid becoming rich

We’ve all heard the stories about the Silicon Valley barber who became a millionaire by listening to and investing in the companies of the executives whose hair he cut. Or about the thousands of employees during the early days at Microsoft Corp. who became millionaires simply by accumulating their stock options as the company’s stock price grew and grew.

Although starting your own company still remains one of the best ways to amass a large amount of wealth, not everyone has the temperament to be an entrepreneur. And not everyone has the skills or opportunity to work for a high-flying startup. But anyone today has the ability to invest his or her savings in the newest publicly traded technology company to try to strike it rich.

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