Group Health Insurance April 4, 2006
Posted by chasingdollars in Business, General.2 comments
Over at Fearless Money there was a question about whether or not obtaining group health insurance through your own small company is a deal or not.
I can confirm that it's a fine deal. I currently do it and wouldn't think of having insurance any oither way. No qualification is required, group premiums are typically discounted from individual policy premiums, and as long as the provider is willing to accept you (or rather, your company as a group), your coverage continues as long as you pay the premiums. The only limitation is that you can't change your policies except during open enrollment season, which is typically the month before the anniversary of your policy's commencement date.
Other than that, if you're searching for health insurance, aren't covered by an employer's policy, and have a small company that has been legitimately registered, it's a great deal.
Target Retirement Funds April 1, 2006
Posted by chasingdollars in Investments, Planning for the Future, Retirement.3 comments
While I concentrate on beefing up my emergency savings and paying off wedding and honeymoon expenses, I don't have a lot of time for investment research. Overall, my investment strategy is simple: I'll take a lot of risk now and trade it for greater returns over my remaining career period. I plan to retire sometime around 2040, so I have a ways to go and time is on my side. However, I need the next 6, 9, 12 months to myself so I can make sure our current soft assets are where they need to be.
But I don't want to lose that time in terms of investment returns.
What was I to do? A friend suggested target retirement funds: mutual funds that are managed by professionals that automatically allocate the holdings of the fund based around a target retirement date. They manage reallocations, dividend reinvestment, and other things. All the investor does is buy shares. This seemed like a perfect solution for me–at least temporarily–since I would be able to invest reasonably intelligently by piggybacking on someone else's efforts during the period in which I don't have time to do the proper research myself.
So upon receiving my old 401(k) rollover check last March, and upon the establishment of my own business' Keogh plan, I decided to invest in Fidelity's Freedom 2040 fund. Yahoo Finance has a pretty good analysis of the fund here. It has low expenses, is managed pretty well, and seems to be doing OK. Since I have an existing relationship with Fidelity, I paid no commissions to purchase shares in the fund.
As far as performance, according to Microsoft Money, my investment in the fund has returned over 15% over the past three months. Of course, it was a good period in the market, but I still think the results are more than adequate for now.
When I have more time to do a good analysis of my portfolio, I may shift away from this fund, but right now I'm pleased with the decision.
What are your thoughts on these funds? Any gotchas?
