IRA, 401(k), Roth: What clients should consider A panel of financial and retirement experts tackle the benefits to retirement savers offered by IRAs, 401(k) plans, and Roths, in this article on The Wall Street Journal. One expert focused specifically on the advantages of lower-cost index funds. But taking his analysis a step further than just the idea of lowering expenses on a one-time basis, he noted how index funds' can have an impact on clients' behavior that has longer-lasting effects. He says that investors who buy actively managed funds not only pay a higher fee at the time of purchase, but since they are more likely to feel that the market can be timed, they are more inclined to buy and sell and, subsequently, rack up more of those fees that were higher to begin with. Indeed, he cites statistics from Morningstar that suggest the average investor in pricey funds lost nearly 3% per year due to poor timing. He then contrasts that to the sales pitch of an index fund, which is simply to match the market's success. Once an investor has made that behavioral and emotional leap, the desire to game the system by picking tops and bottoms wanes a bit. Another expert on the panel said that contributing to Roth accounts may not always be the best option, especially to those who are in higher tax brackets, while an asset manager reminds retirement investors that they may not have the same investing goals as their fund manager. --The Wall Street Journal

4 habits clients should adopt to boost retirement wealth To succeed in investing for retirement, clients should develop the habit of saving more instead of just relying on their investing abilities, according to this article on Money. Passive investing often results in better returns than choosing a more aggressive approach, while finding ways to reduce investment costs can help enhance overall returns. Retirement investors are advised to resist the urge to take more risks in exchange for bigger return potential. They should also try to avoid being overconfident and stick to their long-term investment strategy. --Money

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