Please give an example of the principle of risk-return trade-off.

When investors take more risk with their investments, they generally have the potential for, but not a guarantee of, a higher average return. For example, stocks (and stock mutual funds), which are very volatile in the short term, have historically produced the highest average annual returns of any asset class over the long term. By comparison, cash-equivalent assets, such as money market mutual funds and certificates of deposit, have less risk of loss of principal but generally pay relatively low …

Why do employers prefer defined contribution retirement plans?

Since the mid-1980s, there has been a trend away from defined benefit pensions toward less costly defined contribution plans, especially 401(k)s. A major reason is that defined contribution plans are not linked to a specific benefit formula based on age and years of service. Workers simply receive the amount that they have been able to save with employer matching (if any), plus or minus investment earnings. Thus, the risk of workers’ longevity is not something that employers offering a defined …

Is there a legal requirement to print an obituary in the newspaper?

Check with an estate planning attorney or the county office that administers probate proceedings (often called a Surrogate) in the area where the deceased person lived. Most regulations regarding estate planning issues are state-specific. Many states do not have a legal requirement to have an obituary printed in a local newspaper.

If someone decides that he or she doesn’t want a printed obituary, or if the deceased person’s survivors decide not to have one, there is no state law that …

Once a person’s estate has been settled, how long should you keep tax returns that the deceased had filed?

Three years from the year that the estate was settled would be sufficient for federal income tax returns. This is the same minimum time frame that is suggested to keep documentation for federal tax returns when tax filers are alive. If you want to be on the safe side, you can extend this up to six years, which is the time frame in which the IRS can initiate an inquiry if it suspects that someone did not pay their fair …

My mother passed away more than three years ago. The estate has long been settled. How long do I need to keep her financial records? Her house was passed on to her four children.

Which records to keep and how long during one’s lifetime depends on the type of record being considered.

See this page for guidelines: Organize Your Important Papers.

In regard to estate issues after someone’s lifetime, you should keep the estate financial records 7 to 10 years or more from the time the estate was settled (not the date of death). It is necessary to keep records for this length of time because, if income on the estate was underreported …

Is unit pricing mandatory in large U.S. grocery stores?

Unit pricing regulations usually require the posting of unit price per pound, ounce, etc., on supermarket shelves for each consumer commodity, along with the sales price, so that consumers can compare value more easily. A careful review of unit pricing regulation shows no mention of a retail outlet’s size. Rather, it seems that each state has authority to decide what unit pricing regulation it desires, if any, and regulatory differences between states are expressed in various categories of products, but …

Does the exception to the required minimum distribution (RMD) rules apply to self-employed persons who are still working and have SEP plans?

You are referring to the “still working exception” for the required minimum distribution (RMD) from tax-deferred retirement savings plans. This exception applies to employer-sponsored retirement savings plans such as 401(k)s and 403(b)s. If you have one of these plans, you can delay the beginning date of your RMD to April 1 of the year following the later: the year you turn 70½ years of age or the year you retire, unless you own more than 5% of the company. The …

How much does a 4-H Cooperative Extension agent earn per year?

It depends. Each state has its own pay scales and salaries for 4-H agents (and other Cooperative Extension personnel) that vary among states. Some factors that affect the amount of earnings include educational requirements, the cost of living in the area where an agent works, whether 4-H agents belong to a union, and whether 4-H agents are in a tenure-track position at a land-grant university.

For more information about a particular state’s 4-H agent salaries, visit its Web site where …

What financial ratios are the most important to a homeowners association?

Regarding an individual homeowner’s financial ratios in order to qualify for a mortgage or to refinance, the same criteria apply as for loans for any single family residence. Lenders generally like to see monthly PITI (principal, interest, property taxes, and insurance) payments no higher than 25% to 29% of a loan applicant’s monthly gross income. This is called a front-end ratio. In addition, lenders generally require monthly payments for PITI and all consumer debts (e.g., loans and credit cards) to …

I am 79 years old. What is the required minimum distribution (RMD) for my IRA and 401(k) plan?

This worksheet will help you determine your required minimum distribution (RMD): http://njaes.rutgers.edu/money/ira-table.asp. As you can see in the table, the divisor for age 79 is 19.5 years. Thus, you must divide the total of your assets in all types of tax-deferred retirement savings plans (e.g., 401(k)s and IRAs) by 19.5 and withdraw and pay tax on at least this amount. You can, of course, withdraw more money but will owe taxes on the distributed amount.

To determine your minimum …