Kiplinger's Personal Finance

Kiplinger's Personal Finance September 2020

Written to help you do a better job of managing your personal and family financial affairs and to help you get more for your money. You get ideas on saving, investing, cutting taxes, making major purchases, advancing your career, buying a home, paying for education, health care and travel, plus much, much more. Special issues cover the latest information about car buying (December) and Mutual Funds (March and September).

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3 min
the election and your money

Whether the upcoming presidential election is a battle for the soul of the nation or the way to keep America great is a question we will leave to you to answer. But the election will have important ramifications for your financial wellbeing, and we’re all over that agenda. How will each of the candidates help steer the economy? What might your tax bill be? Is your portfolio headed for gains or losses? For those questions, the person living at 1600 Pennsylvania Avenue for the next four years matters. At the start of the year, a sound economy, rock-bottom unemployment rates and a roaring bull market made it Donald Trump’s election to lose. Then came the coronavirus pandemic, exacting a vast and tragic human toll, putting a dramatic end to the longest…

2 min
what’s out and why

This year, we made four changes to the ETF 20. Low-volatility strategies disappointed. Invesco S&P SmallCap Low Volatility is designed to offer a smooth ride in a typically rocky asset class. But during the COVID sell-off, it tumbled 44%—more than the 41% loss in the Russell 2000 small-company index. The fund was loaded with real estate, utility and financial stocks, all of which suffered during the downturn. Low-volatility strategies are steadier than the broad market about 85% of the time, says Nick Kalivas, senior equity ETF strategist at Invesco. “This time was one of the periods in which low volatility failed to provide downside protection,” he says. A low-volatility investment strategy can work well over the long term. But it requires monitoring—more than we like for a primary holding. So we…

10 min
find the best etfs for your goals

The pandemic is still top of mind. But the bear-market sell-off that it sparked is now a distant memory, thanks to one of the fastest rebounds in history. Yet volatility remains. Market sentiment shifts with the trendline in new COVID-19 cases and any news, good or bad, of a vaccine. It’s a crucial election year, too, which can move markets in unexpected ways. Even so, investors now realize a true market resurgence hinges on an economic recovery and a revival of corporate profits. Despite a market buffeted by big moves and clouded by uncertainty, the past year has been huge for exchange-traded funds, those increasingly popular low-cost securities that hold baskets of assets and trade like stocks. Assets in ETFs topped $4 trillion last year, ahead of the $3.8 trillion in…

2 min
how to fix a bad plan

Like gauze on a camera lens, a bull market can hide a lot of blemishes in retirement savings plans. But when the market heads in the other direction, the plan’s flaws become glaringly apparent. That’s particularly the case with some 403(b) savings plans. Typically offered to public school teachers, 403(b)s have the same tax benefits and contribution thresholds as 401(k) plans, but they’re often vastly inferior to their private-sector counterparts. Many school districts turn the job of offering retirement plans over to sales agents who promote investments with high-cost equity-indexed and variable annuities. If you find yourself stuck with a poor-performing 403(b) plan, you have a few options, says Scott Dauenhauer, a certified financial planner with Meridian Wealth Management, in Murrieta, Calif., and founder of the Teacher’s Advocate blog ( First, get…

2 min
plan b if you need cash fast

If you don’t have an emergency fund and the bills are starting to pile up, you may be tempted to start charging more expenses to your credit cards. But before you run up a high-interest balance that could take years to pay off, explore these options. Roth IRA. If you need the money, a Roth is a low-cost source of funds. You can always withdraw the amount of your contributions tax- and penalty-free. That money comes out of the account before earnings do; you won’t pay taxes until you’ve depleted your contributions. A 401(k) loan. The economic stimulus package enacted in March doubles the amount you can borrow from your 401(k), from $50,000 to $100,000, or up to 100% of the vested balance if less. This option is available to workers (or…

3 min
this olympian has a new goal: closing the wealth gap

Lauryn Williams is a certified financial planner with Worth Winning, in Dallas, and an adviser for Student Loan Planner, which provides consulting and refinancing services for borrowers. She is a three-time Olympic medalist in track and field and the two-woman bobsled, and the first U.S. woman to medal in both the Summer and Winter Games. What led you to become a certified financial planner? I didn’t get the kind of service I wanted from either one of the two financial advisers I had during my time as an Olympian. They didn’t help me with my budget. We didn’t have conversations about my short- or long-term goals or savings. I was earning more than $200,000 in sponsorships before I was old enough to drink. I knew I needed more information to be better…