Government 
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Your take: Are you worried about US default?

Have you learned to stop worrying and love default?It’s now less than a week until the federal government is projected to run out of accounting tricks and come up hard against the debt limit, the maximum amount the U.S. is allowed to borrow under existing law.

After that, what happens next is hard to predict. The government might be able to prioritize payments to Treasury investors for a while by stiffing other groups owed money, such as active military personnel and Medicare and Social Security recipients.

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 Investing 
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How a debt ceiling crisis and U.S. default would annihilate your 401(k)

If you own stocks and the U.S. breaches the debt ceiling, you're gonna have a bad timeIf you’ve been tuning out the dire warnings coming from economists and politicians about a possible debt ceiling crisis, I can’t really blame you. Politicians in particular spend a lot of time stirring up public fear about supposedly imminent but ultimately nonexistent crises in order to push their policy agenda (“the domino theory,” “death panels,” etc.).

But I believe a failure to raise the debt ceiling, and the default of Treasury debt it would trigger, would have real and seriously crappy consequences, particularly for all the people invested in the stock market through their retirement plans.


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 Retirement 
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4 red flags of a bad 401(k) plan

Some 401(k)s have big red flags like these.One of the great advantages of working for “the man” is retirement benefits, including the possibility of contributing to a 401(k) plan that offers you the chance to save for retirement with pre-tax dollars.

But are all 401(k) plans created equal? Certainly not. Right now, Fidelity Investments is being sued by some of its current and former employees due to the nature of its plan. According to the lawsuit, Fidelity’s plan funnels employees into investments that have high costs, and might not provide the best bang for the buck. (Fidelity plans to fight the suit, and counters that there are plenty of low-cost choices available with its plan.)

Seeing a lawsuit like this hit one of the biggest providers of workplace retirement plans in the country should make you wonder: How does your own plan stack up?
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 Investing, Retirement 
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How to choose between a traditional 401(k) and a Roth 401(k)

401KIt’s been several years since the Roth 401(k) was introduced to the American retirement scene. As this retirement planning option has become more well-known, and as more employers offer the Roth version of the venerable 401(k), more workers are faced with making a decision about which is more likely to help them reach their retirement goals.

If your employer offers access to a Roth 401(k), it makes sense to rethink your retirement contribution plan. Here’s how to decide which type of 401(k) to use for your retirement investment.


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 Personal Finance 
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Your take: Fit all finance advice on a 3×5 card

What personal finance advice do you consider essential?
This week a fascinating exercise by University of Chicago professor and Incidental Economist writer Harold Pollack made the rounds in the blogosphere.

Asked by a reader “What is this simple free best personal finance advice that fits on a 3×5 card?” Pollack filled out an index card with what he thinks is all the knowledge you need to manage your personal finances.


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 Retirement 
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401k or IRA: Which Should You Fund First?

One of the questions that many people have as they plan for retirement is whether they should fund a 401k or an IRA first. And, of course, the answer depends on what you are trying to accomplish with your retirement fund.

IRAs and 401ks have some different advantages and disadvantages, and it is up to you to determine what is most likely to be the best course of action for you. As you try to figure out what to do with your retirement money, here are some things to consider:

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 Devil's Advocate 
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Borrowing From Your 401(k)

Devils Advocate Logo
This is a Devil's Advocate post.

One of the oft-discussed cardinal sins in personal finance is to borrow from your 401(k), 403(b), or other eligible retirement accounts. The reasons against borrowing are obvious – those assets are for you to consume in retirement, not right now. By borrowing those funds, they can’t grow with the market tax free and you lose one of the great vehicles for retirement planning.

Not everyone can borrow from their 401(k) or 403(b), the plan administrator has to permit it, but this Devil’s Advocate post will discuss reasons why this may make sense for the limited number of employees who can borrow from their 401(k) plan.

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 Retirement 
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2011 Retirement 401K, IRA, Roth IRA Contribution Limits

Every year around this time the IRS releases updated retirement contribution and tax bracket information for the coming year. We probably won’t see much by way of tax bracket information since Congress has its work cut out for it, but earlier this month they released contribution and deduction limits for retirement account contributions for 2011. As you’d expect, not much changed since inflation was minimal.

There were no changes to the contribution limits and some phaseouts saw their ranges increase slightly.

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