As people reach and/or enter retirement age they recognize how important a role that their 401k assets are to their financial future.  For many, these assets are the cornerstone of their retirement plan.  It is critical that these assets are invested to address the specific needs and objectives of each person.

Why transfer these assets into an IRA Rollover?  There are a few key reasons.

First, 401k accounts are great vehicles for accumulating assets.   Your money is deposited directly from your check on a pre-tax basis.  Most companies offer a match to the deposits you make.  Unfortunately we find that these accounts tend to have a limited amount of investment choices.  And these choices tend to be very narrow.  In addition, the choices in these account tend to have a level of volatility that may work for you when you are dollar cost averaging your deposits, but are ill suited to developing a plan to enable you to use your money effectively.

Moving those assets into an IRA Rollover dramatically expands the choices available to you.  These choices include many types of investment vehicles that are unavailable in the 401k world.  Many of these choices may be exactly what you need to limit volatility and create better sources of income.

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A common problem we find is people who have multiple IRA or other financial accounts in different places.  Consolidating assets under a single advisor has several benefits and solves many problems. Here are four reasons to consolidate:

1. Without a clear picture, you can’t make the best decisions. When your assets are scattered among multiple accounts, it’s simply too difficult to truly understand where your real financial picture stands. It make difficult to understand portfolio and manager performance on all levels. You can’t improve or fix what you can’t really see.

2. Scattered assets often undermine diversification. We have found the same (or very similar) investment products in these uncoordinated accounts.  This lack of diversification can serve to increase portfolio volatility, just the opposite of what you want to achieve.

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If you now work or have worked for a company that issues publicly traded stock, you have probably considered these questions: Should I buy shares from the ‘company store’ and, if so, how many?

Many employee investors perceive great advantages in buying company stock. They might be able to buy it at a discount. And they think, “Who better than us employees to assess whether the company is on the rise and worth an investment?”

But many employees overdo it and put too much company stock in their portfolios.

Case in point: More than half of Enron’s employees held company stock when it lost 99% of its value in 2001. Last year,  BP’s employee savings plan had $2.5 billion, nearly 30 percent of its total assets, invested in BP stock, which tanked following the Deepwater Horizon explosion.

Employees at those companies invested in company stock for the same reasons you might.

In a 2004 survey, the Employee Benefits Research Institute found that more than one of every 10 people surveyed had more than 80 percent of their 401(k)s allocated to company stock.  What happens if scandal or disaster or just bad luck strikes those employees’ companies?

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We came across a great article on the online “Financial Topics Newsletter.” We wanted to share it with you here, with permission of the publisher, because it covers a topic that is so pertinent for so many of our clients…

With limited resources for saving, which is the most important financial goal – saving for your retirement or saving for your child’s college education? While many parents want to pay the entire cost of their child’s college education, the reality is that there are a variety of ways to save for that education – personal savings, financial aid, and loans.

Unfortunately, there aren’t similar options for your retirement. No one is likely to loan you money if you haven’t saved enough for retirement. You may want to maximize your retirement savings, realizing that there are ways to use those savings to help with education costs. How can that strategy help when it comes time to send your child to college?

• Your retirement savings won’t be considered in financial aid formulas. The federal financial aid formula does not consider retirement accounts, including 401(k) plans and individual retirement accounts (IRAs), when calculating your expected family contribution. For other assets, the formula assumes that 5.6% of the parents’ assets and 20% of the student’s assets will be used annually for college costs. Thus, you may actually increase your financial aid award by saving in retirement accounts.
• You can still use these retirement assets to help pay for college costs. Money in IRAs can be withdrawn to pay higher-education expenses before age 591/2 without incurring the 10% federal tax penalty, although income taxes will be assessed on the taxable portion of the distribution. If the money is withdrawn from a Roth IRA, your contributions can be withdrawn at any time without penalty or taxes, while earnings can be withdrawn before age 591/2 by paying income taxes but not the 10% tax penalty. With 401(k) plans, you typically can’t withdraw the money before retirement age unless it is for a hardship withdrawal, but you can borrow funds if permitted by the plan. If you don’t need the money to finance college costs, you can leave it in your retirement plans to continue to grow for your retirement.

Last summer, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to govern the financial industry and, presumably, prevent the abuses that led to the 2008 meltdown.

It has taken nearly 12 months for the SEC to issue its interpretation of the law and to clarify the rules that now apply. So as Dodd-Frank prepares for its first birthday on July 21, its rules are just now taking effect.

What does it mean for you?

The new law imposes regulations to reduce risk and boost transparency in the global swaps marketing. Market manipulation in the swaps market contributed to the 2008 market collapse and credit crisis.

There are caps on debit card interchange rates. The compensation structure for mortgage loan officers has changed. Wall Street firms will have to limit proprietary trading. The law also establishes new rules to incentivize and protect whistle-blowers.

The financial industry is fighting the new rules, and Republicans in Congress are poised to overturn many of the provisions.

We keep seeing the gloom-and-doom stories about the Greek debt crisis on television so we thought we should share our perspective with you. What’s going on and how does it affect you?

Greece has been living beyond its means for years, living on money borrowed from a variety of sources, primarily banks in Europe. Now the banks are calling the debt and Greece is not able to pay.

Most feel Greece will eventually default on the debt. When that happens, what will happen to the banks? Will the pain spread to other European nations with their own debt issues – like Ireland, Portugal, Spain and Italy?

For the short-term, Greece will probably extend the debt to a longer timeframe. This doesn’t solve the problem for Greece or the banks. But it matters for you.

The stock market has had time to react to the crisis and the fears for the worst so we think the markets may already have absorbed much of the impact.

Greece and the European banks are not out of the woods, but we think the doom-and-gloom news reports prey on emotion and fear.

After financial markets collapsed in 2008, the Federal Reserve committed to buy US Treasury bonds to prop up the economy. By purchasing bonds on the open market, the Fed hoped to keep interest rates low and put more money in the hands of lenders and the general economy. Ultimately, this would support risk asset prices, aid consumer confidence, and help labor markets.

The practice, known as quantitative easing, came in two waves. When the first wave (QE1) ended in spring 2010, stocks tumbled. The second wave (QE2) began in November and ended on June 30 after the Fed pumped about $600 billion into the economy.

Now what? Will interest rates rise? Will stocks tumble again? Some analysts predict economic storms. Others say QE2’s end will pass with a whimper.  Just like a hot summer day in St. Louis, the conditions may be right for a storm, but the forecasters cannot be certain.

Here are some things you should know…

Corporate earnings have been extremely strong, and balance sheets appear to be very strong. In general, the economy is much stronger today than it was when QE1 ended. If this continues, it should help the market, but this is never guaranteed.

Another positive sign:  the Fed has committed to continue a relatively modest bond-buying program. Many analysts had predicted that there would be no QE3, but the Fed has committed to reinvest proceeds of its holdings in maturing debt. It could purchase about $300 billion of debt in the coming 12 months, half the amount of QE2. Some analysts are calling this QE2.5.

But there are reasons for concern. If investors fear that bond prices will drop, this could spill over into the stock market. And no one knows how the end of QE2 will affect inflation. We have seen energy and food prices continue to rise. Will other commodities, such as gold and other precious metals, benefit from inflation fears?

Finally, the housing marketing remains weak and represents a significant threat to economic recovery.

Will the Fed do more than QE2.5 and launch a bigger program (QE3)? It’s unlikely unless there is a significant weakening in the economy.

The bottom line for you: Think of the end of QE2 as a tornado watch. Conditions may be right for a storm. But then again, you may see nothing but blue skies and sunshine as the storm threat passes. So you should be alert, scan the horizon, and watch and listen for changing conditions.

If you’re a baby boomer, born between 1946 and 1964, listen up. You may be one of the risk-averse boomers described here whose comfortable retirement is threatened by a portfolio that won’t deliver the required income stream as long as it’s needed.

Influenced by their parents’ generation, many boomers are obsessed with the safety of their principal. They wrongly believe that assuring the income from that principal will provide them with a secure retirement. But for many of them, a purely fixed-income portfolio will at some point fail to deliver the lifestyle-sustaining income that they’ll need during several decades of rising costs.

If you’re one of these safety-obsessed boomers, it’s important that you consider broadening the asset classes in your portfolio. On the equity side, high-quality, dividend-paying stocks could be a natural replacement for any growth stocks you own.

On the bond side, you might want to look at income-producing real estate as an alternative. (Please Note: This suggestion is not an endorsement for commercial real estate, nor is it predictive of its future.)

Just as many boomers tend to overestimate the effect of equity volatility on stock values, they also may underestimate the effect of rising interest rates on bond prices. It’s just simple arithmetic that the next major move in bond prices—whenever and however it comes—will most probably not be up.

In a modern-day reenactment of the California gold rush of the mid-1800s, investors concerned about the downgrade of the U.S. credit rating flocked to gold, pushing the price of the precious metal above $1,700 for the first time on August 7.  But five days later, the price of gold fell for the second straight day on news of strong retail sales.

The weak U.S. economy is causing many investors—perhaps you among them—to consider getting into gold either for the first time or more heavily as a hedge against a declining dollar. The questions they’re asking include these:

• Should I own gold?
• Should I buy now or wait for a pullback?
• Should I sell equities to buy gold?
• Could gold be the next bubble?

These are all good questions to ask. The most important thing to remember, however, is that gold—regardless how glamorous or exciting an investment—carries the same risks as any stock. Because the news on gold is already out, the real risk is what we don’t know.
So what should you do? Lacking a crystal ball, the best advice—as for any investment—is to buy carefully if you buy at all. And be sure to review your portfolio before you buy. You may already own gold, because many futures, mutual funds and exchange-traded funds invest in the metal.

Finally, this lesson from history may help counterbalance any “irrational exuberance” you may feel with regard to gold. Although some 200,000 people flocked to California to pan for gold in 1849-1855—and gold worth tens of billions of dollars was discovered—most left with less than they started with.