Have you ever wondered what happens to your 401(k) when you quit or lose your job? While 401(k) funds may not be a tangible asset, it will still exist after deciding to resign your position or have lost your job.
What happens to your old 401k when you quit a job?
There are various options for you to choose from, including leaving your account where it is. You may roll over the money from the old 401(k) into a new account with your new employer or move it into an individual retirement account (IRA). While all these are possible options, first make sure you can participate in a new type of plan. Lastly, and one we don’t often recommend is taking everything out however, there are severe tax consequences.
Should I take all my 401k funds?
We don’t recommend taking all your 401(k) funds because this is an employer-sponsored retirement account. It allows you to save a percentage of your pre-tax salary to a retirement account. These funds are invested in a range of stocks, bonds, mutual funds, and cash. It is almost like taking money out of your piggy bank for non-emergency situations. Unfortunately, many have lost their jobs with the current pandemic, and the unemployment check may not suffice for all your expenses. Remember you can borrow in certain situations without a tax penalty. If a 401(k) withdrawal is the only way that you can pay your bills without taking on costly credit card debt, do it.
What if your new employer does not offer a 401k plan?
So what happens if your new employer does not offer a 401k plan or if you’re not moving to a new employer? You can roll your 401(k) to an existing IRA or a new IRA account. When you have a 401(k) plan with your employer, you don’t get to decide what companies to invest in, but now you have full reigns to freedom to invest how you want, where you want, and in what you want!
Invest in companies that align with your values
Now that you are free to invest in companies that align with your values, consider impact investing as a choice! Click here to view a more in-depth blog-post about 401(k) rollovers into social responsible investments. Impact investing allows you to invest your money into companies, organizations, and funds with their intention to be beneficial to social or environmental issues. At Invested Interests, we make it easy for you to rollover your old 401K into a new retirement account. We work tirelessly to help our clients express their passions through their investment decisions.
Let’s say you are about ready to retire. You can begin taking qualified distributions from your 401(k) after the age of 59 ½, which means that when you decide to take out some money without paying a 10% tax penalty for early withdrawal. Whatever you decide to do with your 401(k), Invested Interests is here to help you in your strategic financial decisions and support in choosing impact investing portfolios.
You’ve probably heard the term “Mutual Fund” before. Maybe it was in passing at work or around the dinner table with your in-laws, but there was never any real clarity around what they actually are, so you never looked into them. You’re not alone. A little over a year ago less than half of U.S households owned some kind of mutual fund. Understanding what a mutual fund is, paints a clearer picture of why it can be an asset for your financial goals and opens the door to new investment opportunities like ESG Funds! We’ve done our best to present you with the mutual fund basics so you can decide whether or not you’d like to join our bandwagon.
What is a mutual fund?
Mutual funds have a complex name, but they aren’t as overwhelming as they sound. Essentially, a mutual fund is a collective investment that pools money from multiple investors. That money is then used to purchase a variety of securities like stocks or bonds. By joining a mutual fund you’re purchasing a share of those collective investments.
Why are mutual funds used for?
People join mutual funds for a variety of reasons, and sometimes new investors don’t even have a good understanding of what they are before joining! Here are some of our favorite reasons from TD Ameritrade for joining a mutual fund.
- They allow you to create a diversified investment.
- They are managed by a financial professional.
- They allow investors to participate in a wide variety of investments.
How do I get started?
The simplest way to start investing in a mutual fund is to find a financial advisor or investment management company that you trust. Knowing who you should choose to manage your mutual fund shares depends on your personal values and goals. Here are a few things to consider.
- Do you value human relationships? Some management companies are completely online and primarily interact with their clients using artificial intelligence (ai) software. However, these Robo Advisor companies don’t allow you much control over what kinds of funds are available to you. The other option is to opt for a company that handles their business face-to-face and is interested in getting to know you and your goals.
- Do you want to know your investment is contributing to positive change? You can join any mutual fund available to you, but there are some that are more ethically sound than others. Knowing that your money is going towards a noble cause like environmental protections, human rights & diversity, or global peace efforts is an added bonus to your investment. Besides, no one wants to admit their booming investment is actually at the hands of companies with poor morals.
- How much do you want to contribute to the start of your investment? If you’re about to invest in your first mutual fund you’ll need to determine how much money you want to contribute to open your account. Some management companies have investment minimums, and won’t take clients who can’t afford to meet that amount. Other companies, like us, opt to have no investment minimum in order to get as manypeople on the right financial path as possible.
Connect with us if…
If you want a management company that operates face to face, ensures your investments align with your values, and has no investment minimum, we think we’d be a great match for you!
We’re eager to get to know you and learn what goals you’re working towards and apply our services accordingly. To learn more about what we do, where we come from, and how we can help, visit our website and connect with us today!
This topic hits a little different for us. Investing in Peace is so closely related to the story of Invested Interests. Whether you’re talking about investing in companies who make efforts to support non-violent negotiations or divesting from companies who turn a blind eye, supporting peace efforts with your portfolio is something everyone should pursue.
We don’t often talk about our story, because well we like to shine the spotlight on those who need it most but today, our story and our topic of discussion go hand in hand.
The passion behind invested interests began in 2003 with news of the Darfur Genocide. During this crisis, the Janjaweed began slaughtering, raping, and torturing Darfuri men, women, and children in Western Sudan. To take a stand against these atrocities, the Sudan Divestment Task Force led universities, endowments, and other institutional investors to divest from companies supporting the regime.
Invested Interests worked with the Sudan Divestment Task Force to make their divestment list available through online tools and portfolios that helped individuals investors avoid the targeted corporations. Divesting in specific companies, like Schlumberger and PetroChina, has had a significant impact in the region. And while human rights in Sudan remains a pressing issue, progress has been made since 2008.
Support Peace with your Portfolio
At invested interests, we take two approaches when it comes to supporting peace. We focus on good companies to invest in and bad companies to divest from.
We believe that companies can play a positive role in promoting peace and limiting conflict around the world. Our peace portfolio follows the following guidelines to ensure your hard-earned money makes the biggest possible impact.
We invest in: Companies promoting conflict resolution, companies promoting international relief efforts, and companies with no regime affiliations.
We divest from: Guns and weapons dealers and manufacturers, companies working with regimes in armed conflict, and companies with military contracts and war profiteering.
Why you need to invest in Peace
According to the world population review, there are currently 232 countries currently at war. Some of the biggest conflicts within that list are those that are occurring in Afghanistan, Yemen, and Syria.
In 2019 alone, this seemingly never-ending war claimed over 41,700 fatalities. Although this war has been on and off since 1978, this current phase has been ongoing since 2001.
The war in Yemen began five years ago and is estimated to claim over 233,000 lives by the end of 2020. The United Nations has called this conflict one of the “greatest preventable disasters facing humanity”.
The on-going conflict in Syria has been declared the second-deadliest war of the 21st century. This civil war began in 2011 and today has approximately 500 U.S. troops deployed in the country. According to the Council of Foreign Relations, this conflict has internally displaced 6.2 million people.
You can make impactful choices
Oftentimes it’s really easy for us to turn a blind eye to what is happening in foreign countries. We simply get lost in the internal issues we see in our daily lives. However, just because we don’t feel the ramifications of these conflicts, it doesn’t mean we can’t have a positive impact. If you’re unsure what companies are included in your investment portfolio, it’s hard to determine whether or not your financial assets are contributing to peacebuilding efforts.
Through impact investing, you not only have peace of mind that you aren’t indirectly supporting armed conflict, but you’ll have confidence in knowing your investments are doing the most to make a positive impact. If you’re unsure how to start impact investing or are curious about other ethical investment strategies, we’d love to get in touch. Connect with us today to start making an impact with your investments.
Earth to readers! As a global pandemic is in full effect, it is essential not to forget about another worldwide crisis that has been unfolding way before the pandemic: climate change.
Global warming is not something new, human activity started influencing climate change in the 1830s. While the industrial revolution may have had its advantages like creating more job opportunities or inspiring innovation, as we began to industrialize, we also started to change our atmosphere’s chemistry by emitting large amounts of CO2 and other pollutants to our air. It is important to note that industrialization was not the only contributing factor to global warming. The coal industry, for example, on its own, generates 1.7 billion tons of carbon emissions every year. We know for sure (backed up by science) that humans have contributed to climate change.
Where are we now?
During the 2016 Obama administration, the United States joined the Paris Agreement. The Paris Agreement is an agreement in which at least 55 countries representing at least 55 percent of global emissions formally join and aim globally to respond to the threat of climate change. Joined parties are required to report their emissions and their implementation efforts regularly. Unfortunately, as of June 2017, the Trump administration decided that the United States will cease all implementation of the Paris Agreement. As a country, political decision-makers are currently not taking action towards climate change as our current president believes global warming is a hoax. However, the Mercator Research Institute on Global Commons and Climate Change report that around 42 Gt of CO2 is emitted globally every year (1332 tonnes per second), predicting that the CO2 budget will be depleted in just over seven years.
With the recent presidential election, the president elect, Joe Biden, said he would apply to rejoin the Paris Agreement on his first day in office. Following the reapplication, he “would lead an effort to get every major country to ramp up the ambition of their domestic climate targets.” This news brings a new sense of hope for climate change and the future of our earth. But what can YOU actively do to reduce your carbon footprint?
What can we do?
While climate change solutions are necessary globally, you can actively do things to reduce your carbon footprint. You can start by measuring your current carbon footprint through a carbon footprint calculator. Once you have figured out your carbon footprint, you can implement ways to reduce it, including thrifting clothing instead of buying fast-fashion, buying local produce, or even carpooling when possible.
Climate Change Investing
To ensure that our financial investments are not funding an unsustainable future. It is critical to divest from companies using fossil fuels, creating nuclear waste, and destroying natural resources. Invested Interests, helps you identify those environmental funds. Invested Interests environment portfolio invests in green companies, alternative and renewable energy companies, and companies promoting sustainability.
Climate change includes global warming driven by human emissions of greenhouse gases causing large scale shifts in our weather patterns. The impacts of climate change are detrimental to the planet, to us, and our economy. Learn how to invest in climate change.
Investing isn’t the only way to show your support for the environment. Check out How to Vote with Your Wallet for the Environment for eco-friendly financial tips. If you’re new to investing, check out our glossary to get comfortable with financial terminology.
What is climate change investing?
Impact investing aims to generate specific beneficial social or environmental effects. People impact invest because they want to utilize their money and investment capital to bring change to social issues. Climate change investing is one way of impact investing in climate change. People who want to invest in climate change wish to create a sustainable future for coming generations.
Examples of climate change investing?
The two most common ways individuals invest in climate change are investing in renewable energy investing or investing in corporations with green initiatives. Investing in renewable energy companies focuses on manufacturing products that are sustainable and creating solutions that will limit the amount of emissions used in their products.
Investing in corporations with green initiatives allows individuals to invest in companies committed to the conservation of natural resources and implementing new alternative ways to reduce their carbon footprint.
How can you get involved in climate change investing?
At Invested Interests, we make it easy for anyone (beginner proof) to invest in climate change. Our clients invest in green companies, alternative and renewable energy companies, and companies promoting sustainability through our environmental portfolio’s wide range. We avoid oil and fossil fuel companies, companies that aren’t eco-friendly, and nuclear power companies. Companies like Microsoft or Nike are included in our company environment impact investing portfolio.
Ah yes, we’ve found ourselves in that post-election season bliss. You know what I’m talking about, it’s that sweet moment when sunlight finally starts peeking through the storm clouds that have covered our political atmosphere for the past four years. In other words, it’s a moment of hope. For instance, We’ve seen a lot of positives come out of this election, specifically for women.
Let’s just start by saying that our team is beyond ecstatic that, for the first time, there is a woman holding the title of vice-president-elect. Kamala Harris is paving the way for countless young women by demonstrating that women who have a passion for politics can become everything they’ve aspired to be. In fact, this election season we’ve seen several strong women use their voice to champion women and women’s issues.
All four members of The Squad won their victories for re-election, we’re talking about Alexandria Ocasio-Cortez of New York, Ilhan Omar of Minnesota, Ayanna Pressley of Massachusetts, and Rashida Tlaib of Michigan, which has been great news for many women who look up to their leadership. All in all, the United States has made some solid steps to increase the presence of women in politics…but does anyone else feel like this is longggg overdue?
This election made us wonder, how many other countries have already taken these steps? Given that the United States is known to be a somewhat of a leader on the global scale (maybe a less serious one thanks to a certain Mr. #45) shouldn’t we have seen women in these prominent elections a while ago?
Well, we can’t necessarily tell you why it’s taken us so long, but our curiosity did lead us to some great information about how familiar other countries are with female leadership. Here’s what you should know:
Some of the best COVID-19 responses have come from countries led by women.
Germany, Taiwan, and Australia all currently have women sitting in the hot seat when it comes to leading a country through a global pandemic and they have created some of the best strategies to get their citizens through it. For example, Taiwan, led by Tsai Ing-wen, had one of the quickest responses. Since implementing in-depth safety measures, the country has only seen six deaths, which seems miraculous when compared to the US’s current 11.1 million and counting. More on these countries and their responses here.
Women-led countries are more likely to have fast-growing economies.
According to The Harvard Business Review, countries led by women had an average of 5.4% GDP growth in the subsequent year, as compared with their male counterparts’ 1.1%. While this doesn’t guarantee that female leadership will spike a nation’s economy, it is interesting to note. For example, we’d like to shed some light on President Ellen Johnson Sirleaf of Liberia, her time in government lasted from 2006 to 2018, and throughout those twelve years, she fought to create an inclusive government by reflecting the age, gender, religion, and ethnicity ranges in the country through her cabinet. This choice helped her to achieve an average annual 4% GDP growth rate in her first five years in office.
59 other countries beat the United States in having a female leader before Hilliary Clinton was even on a ballot.
Ya, you read that right. One American-centric trap we tend to fall into is believing that the United States is #1 in everything, but in this case, we are terribly behind. Back in 2019, CNN politics put together this handy dandy timeline showing major achievements for women in global leadership dating all the way back to the sixties. Some things have changed since, but only for the better.
The United Nations created a “Women in Politics 2020 Map” that shows some all-time highs but ultimately tells us that women are still underrepresented across all levels of power.
This map, created back in January “presents global rankings for women in executive, government, and parliamentary positions” and it can be a little daunting at first glance. The map itself is color-coded to represent “the percentage of women in unicameral parliaments or in the lower house of parliament”, but also includes information like what political portfolios are held by women ministers, and even the world and regional averages of women in parliament. We’ve included a sneak peek of the goods below.
At the end of the day, the point is that we need more women in politics. Women make up at least 50% of the population, so we should fight for their representation in government! Hopefully, with the dawn of this new presidency slowly approaching us, we’ll see even more victories for strong women on the political battlefield. For the time being, it’s important to know how you can make a difference year-round to support causes like women’s rights and diversity. Let us help you align your investments with your values today by connecting with us here or on social media.