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The following is information from the Securities and Exchange Commission (SEC) to help you frombecoming a victim of fraud.
The SEC advises all investors to do their homework before investing. If you purchase a security solely because an analyst said the company was one of his or her "top picks" you may be doing yourself a disservice. Especially if the company is one you've never heard of. Take the time to investigate how you can protect yourself
Check the U.S. Securities & Exchange Commision's information below before buying any stock
which provides information on the following:
- Research who is legitimate and who is not
- Gather information
- Stock market fraud checklist
- Analyze analyst recommendations
- How to avoid scams
- Check out brokers & investment advisers
- Avoid investment scams & protect yourself online
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Protect Yourself from Investment Fraud
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This is a free tool to help investors research the professional backgrounds of current and former FINRA-registered brokerage firms and brokers. It should be the first resource investors turn to when choosing whether to do business or continue to do business with a particular broker or brokerage firm.
Beware of friendly “professionals” you meet in social situations. Some are, of course, legitimate but an impressive business card or fancy title does not mean anything.
Watch out for those invitations that invite you to a free informative luncheon or seminar often at a fancy restaurant. Be skeptical and ask plenty of questions. Before going check to make sure the presenter or company he/she represents is legitimate. One of the ways you can do so is through www.investorwatchdog.com
Any legitimate investment opportunity should come with a written prospectus which addresses the risks and returns of said investment.
Don't be pressured by any urgency that you must sign up immediately to receive a special price, a prize or a lower commission. In most cases this is a signal this is not a legitimate investment. |
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Avoid Loss of Retirement Savings
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According to a survey by the Center of Retirement Research at Boston College 7 in 10 seniors 51 to 62 who lost their jobs or had health problems or lost their spouse to either death or divorce had problems resulting in a loss of retirement savings.
Advice from money managers/financial planners and articles in the Wall Street Journal;
When money is tight, it's tempting to dip into your 401(k) or your individual retirement account to pay bills. But unless you've exhausted all other options, you should resist this temptation.
Taxes and early-withdrawal penalties will likely consume up to 30% of the money you withdraw, says James Cox, a financial planner at Harris Financial Group in Colonial Heights, Va. You'll also leave a permanent hole in your retirement savings by reducing the amount of money available for tax-deferred growth.
Ways to use your retirement savings without paying the early-withdrawal penalty:
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Use the money for health insurance. The IRS will waive early-withdrawal penalties from your IRA if the money is used to pay health-insurance premiums while you're unemployed.
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If you're 55 or older and leave your job, you can take withdrawals from your former employer's 401(k) plan without paying the 10% early-withdrawal penalty, Cox says. For IRAs, the penalty applies to withdrawals taken before 591/2, unless certain conditions are met. For that reason, Cox says, older workers shouldn't roll their 401(k) savings into an IRA.
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If you have an IRA and you're under 591/2, you can arrange for penalty-free withdrawals by taking advantage of an IRS rule known as the "substantially equal periodic payments" rule. To avoid penalties, you must agree to take a predetermined amount out of your IRA every year for five years, or until you're 591/2, whichever is longer. You'll still have to pay taxes on the money, and you can't stop taking withdrawals if your financial situation improves.
According to the IRS you may use one of three methods to calculate your withdrawals; all of which are tied to your life expectancy. Consult with your financial adviser or IRA provider for details.
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