Month: July 2021

There are two figures you can use to compare the performance of your mutual fund to other mutual funds or market indices: adjusted or unadjusted returns. Which should you use?

Returns are shown on your investment account statement. In reviewing it, you may notice sets of figures for each fund’s average annual total returns. One is adjusted for the maximum sales charge, and the other is unadjusted.

Why are there two numbers? The Securities and Exchange Commission (SEC) mandates that mutual funds show both figures to allow investors a fair and accurate comparison between funds or between a fund and a market index. But many shareholders wonder which number to use to assess the performance of their individual investments.

Both figures show the performance of a fund during the time periods indicated, taking into account changes in share value and assuming reinvestment of all income and capital gains distributions. But unadjusted figures do not account for sales charges. Adjusted figures factor in the effects of the maximum sales charge that can be applied to a certain share class.

Which should you use? Well, you want to reflect sales charges if you paid them. But the adjustment for a maximum sales charge may not provide an accurate barometer for your particular situation. Sales charges are sometimes waived or reduced. For example, for certain share classes, the maximum sales charge applies only if you redeemed your shares during the first years of your investment. In other words, because both unadjusted and adjusted performance figures are standardized, you may find that neither precisely reflects your own investment experience.

Do you want guidance on your individual portfolio’s actual performance? If so, it might be worth a conversation with us. We can help you understand your individual performance. Please call or email today.

These days, Americans hear a lot about the importance of saving for retirement, and individual retirement accounts (IRAs) are one way to do so. But the variety of these investments can be confusing.

A so-called “traditional” IRA requires you to deposit money before you pay taxes on it. It grows tax-deferred. When you withdraw it, it is taxed as ordinary income.

With a Roth IRA, you deposit after-tax money. It still grows tax-deferred. The difference is that withdrawals are tax-free in retirement.

In 2021, for both traditional and Roth IRAs, you can contribute $6,000 if you are under age 50 and $7,000 if you are older than age 50.

Which should you choose? A traditional IRA might be a good choice if you think you will be in a lower tax bracket in retirement. On the other hand, a Roth IRA might be a good choice if you think you will be in a higher tax bracket.

Also available are the SEP IRA or SIMPLE IRA, designed for individuals who are self-employed or operate a small business. In 2021, you can contribute 25% of your income (up to $58,000) to a SEP IRA. And for a SIMPLE IRA, contribution limits are $13,500 if you are under age 50 and $16,500 if you are 50 or older (some conditions apply).

That’s a lot of IRAs to consider. Do you need help choosing? Call or email us, and we can review your financial circumstances and make suggestions.