What Is...?

What is “What is…”?

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What is “What is…”?

You’ve heard over and over how important it is to save for retirement, save for education, save for a rainy day, and invest those savings so they aren’t sitting in a savings or checking account earning absolutely nothing (seriously, 0.05% interest or less at times? Not helping).

You also hear that “It’s easy! Just open an IRA/Roth IRA/Brokerage account and invest in an index fund!” or “Just contribute the max to your 401(k) and pick a target date fund! You don’t need help with that.” But you realize that you don’t actually know the difference between all of those accounts, you don’t know what “contribute the max” means, or what an index fund or target date fund is, and the more you search online (because you are a capable adult that knows how to do a Google search!) the more confusing everything seems.

I hear over and over from people that they don’t know what any of that alphabet soup means and they feel like anyone who’s trying to explain it is also trying to sell them something. The truth is, there are a lot of rules to follow to make sure you’re not making mistakes that will cost you in the long run or cause problems at tax time, and to make sure you’re using each account type as effectively as possible. But you can, and should, understand the basics of how saving and investing work and have a source of information you can trust.

That’s what this “What is…?” series is about. I’m going to break down the financial concepts that people find confusing and explain them in terms that make sense for non-stock-brokers and anyone without a degree in finance. If you, your grandma, and your teenager all understand what I’m saying, then I’ll consider this series a success! I’ll post frequently with the concepts that I know are confusing for a lot of people, and I’ll take suggestions for additional topics at hannah.chapman@x2wealthplanning.com. So, let’s get started!

Juncture Wealth Strategies cannot and does not provide tax or legal advice.  For specific advice on these aspects of your overall financial plan, you should consult your tax advisor or attorney.  This is provided as a summary only and does not guarantee accuracy.