Investments

Check with your HR/benefits department to see if your employer offers a 401(k) match program where they add onto your retirement savings. If they do, think of it like a free money bonus for your...

Check with your HR/benefits department to see if your employer offers a 401(k) match program where they add onto your retirement savings. If they do, think of it like a free money bonus for your retirement and try to maximize that match (i.e., put in as much as they will match for you). It's almost like getting a raise each year, just consider that that money will be tied up until retirement, otherwise you will pay a penalty to withdraw early, negating any extra benefit up front.

Since the tax laws for IRA conversions changed in 2010, now is as good a time as ever to consider which type of investment will make the most money for you in the long run.

The basic types of...

Since the tax laws for IRA conversions changed in 2010, now is as good a time as ever to consider which type of investment will make the most money for you in the long run.

The basic types of IRAs are Roth and Traditional. A key difference between a Roth IRA and Traditional IRA is when you get taxed: now or later. Generally speaking if your tax rate will be higher now than in retirement, a Roth can be a better option. Roth IRAs also afford more flexibility on accessing your funds early if you need them.

For more guidance, check out the following great resources:

• Motley Fool's article that clearly outlines the difference between Roth and Traditional IRAs.
• E*Trade's detailed web seminar. In addition to web seminars on IRAs, they have plenty more about different investing topics. 
• WalletPop's collection of links to IRA calculators to help you do the math.

The difference between short term (less than 1 year) and long term capital gains taxes, the tax you pay on any gains on your investments, can be significant especially in higher tax brackets. Be...

The difference between short term (less than 1 year) and long term capital gains taxes, the tax you pay on any gains on your investments, can be significant especially in higher tax brackets. Be smart about when to sell - if you are close to the 1-year window it might pay to hold on to the investment a little longer to guarantee a lower tax.

For example, if you have an investment that you bought for $100 and are ready to sell for $200, you'll have to pay capital gains taxes on the $100 profit. If you are in the 33% income tax bracket and have held that investment for less than a year, you'll pay $33 in federal taxes. If you've held for more than a year, you'll pay just $15. That's an 18% difference on investment returns that stays in your pocket. 

Of course don't always hold onto an investment for an entire year just for the lower capital gains, since it can lose value in the meantime that offsets the tax difference. But if you are close to the 1-year window it might make sense to wait the extra few days to lock in your tax savings and extra profit. Consider the risks of the investment dropping versus the certain tax relief.

Be careful to avoid a wash sale (buying and selling the same stock or fund type within a 30 day period) which can trigger the higher tax rate. Inversely you might be able to offset some short-term gains (and the higher taxes they bring) by booking some losses that you may have incurred. Mutual funds pay out dividends - and create tax liability - on established dates so know them before you buy to avoid an unpleasant surprise. Consult a financial advisor.

If you are paying high interest rates on debt, beyond what you stand to earn on your investments, you might come out ahead by redirecting those investment dollars towards debt reduction. Consider...

If you are paying high interest rates on debt, beyond what you stand to earn on your investments, you might come out ahead by redirecting those investment dollars towards debt reduction. Consider that if you are paying 20% a year on your credit card balance, but earning 5-10% in the stock market, you are spending more than you are earning. But think twice about cashing out a retirement fund which carriers additional penalties, and consider capital gains taxes which will be an immediate tax hit but one you will eventually pay anyway. Consult a financial advisor.