Financial Intel Monthly

Some individuals believe that return on investment shouldn’t be the only criterion for how they invest their money. For them, the social impact of investing is just as important – perhaps more important.

When it comes to planning for your retirement income, it's easy to overlook some of the common factors that can affect how much you'll have available to spend. If you don't consider how your retirement income can be impacted by investment risk, inflation risk, catastrophic illness or long-term care, and taxes, you may not be able to enjoy the retirement you envision.

Children are a special blessing and their arrival brings boundless love and joy into our lives that you can't put a price on. But adding a child to the household impacts the family budget--and women especially—in very measurable ways. Whether this is your first child or your fourth, here are some financial matters to think about and plan for before and after baby arrives.

When investing in a mutual fund, you may have the opportunity to choose among several share classes, most commonly Class A, Class B, and Class C. This multi-class structure offers you the opportunity to select a share class that is best suited to your investment goals. The only differences among these share classes typically revolve around how much you will be charged for buying the fund, when you will pay any sales charges that apply, and the amount you will pay in annual fees and expenses.
Understanding fees and expenses
 Before you can compare share classes, you need to understand the costs that are associated with mutual funds, since these costs are usually deducted from the money you've invested and can affect the return of your investment over time.
Typically, mutual fund costs consist of sales charges and annual expenses. The sales charge, often called a load, is the broker's commission deducted from your investment when you buy the fund or when you sell it. The annual expenses are asset-based fees that cover the fund's operating costs, including management fees, service fees, and 12b-1 fees (which cover distribution and marketing expenses). The expenses are generally computed as a percentage of your assets and then deducted from the fund before the fund's returns are calculated.
So which share class should you choose? The answer to that depends on two factors: how much you want to invest and your investment time horizon.
Class A shares
Class A shares may appeal to you if you're considering a long-term investment in a large number of shares. When you purchase Class A shares, a sales charge, called a front-end load, is typically deducted upfront, reducing the amount of your investment. Suppose you decide to spend $35,000 on Class A shares with a hypothetical front-end 5% sales load. You will be charged $1,750, and the remaining $33,250 will be invested.
However, Class A shares also offer you discounts, called breakpoints, on the front-end load if you buy shares in excess of a certain dollar amount. Typically, a fund will offer several breakpoints; the more you invest, the greater the reduction in the sales load. For example, a mutual fund may charge a load of 5% if you invest less than $50,000, but reduce that load to 4.5% if you invest at least $50,000 but less than $100,000. This means that if you invest $49,000, you'll pay $2,450 in sales charges, but if you invest $50,000 (i.e., you reach the first breakpoint), you'll pay only $2,250 in sales charges.
Comparing Share Classes
 

[caption id="attachment_media-777" align="alignnone" width="1880"] Getting Help from a Financial Professional

Taking Taxes Into Account When Saving & Investing isn’t always top of mind, but it should be.

When you determine your retirement income needs, you make your projections based on the type of lifestyle you plan to have and the desired timing of your retirement. However, you may find that reality is not in sync with your projections, and it looks like your retirement income will be insufficient to meet your estimated expenses during retirement. This is called a projected income shortfall.

Investing with an eye toward promoting social, political, or environmental concerns (or at least not supporting activities you feel are harmful) doesn't mean you have to forgo pursuing a return on your money. Socially responsible investing may allow you to further both your own economic interests and a greater good, in whatever way you define that term.