Master Limited Partnerships MLPS

This little-known, rising-star asset class has created quite a buzz lately. At least for those in-the-know investors who have heard of them (again, very few investors have). You are ahead of the rush that will surely come toward MLPs by reading this.

In this article we will cover some basics on Master Limited Partnerships (MLPs), and the tax planning issues involved.

Unlike corporations, MLPs pay no corporate-level tax. The partnership company passes the majority of their income to investors.

MLP investors are actually just what the name implies, partners in the public company (technically you are called a "Unit Holder" or a Limited Partner). MLP ownership is measured in units (not shares as with stocks). The quarterly income payments are called distributions (not dividends). Distributions are usually 80-90% tax free, because as a partner you share the income and expense depreciation.

Because of this depreciation allowance, 80-90% of the income payments you receive from a typical MLP is considered a return of capital by the IRS. Which means you won't pay taxes immediately on that 80-90% of the income. The other 10 or 20% will be taxed at your normal earned-income rate.

This tax treatment actually can cause a few issues for investors. MLPs are not normally recommended as investments for your IRA. However, there are now a few ETFs that are primarily investing in MLPs, and paying dividends out to investors. Since the ETF is a normal corporation, it does pay taxes and issues 1099s and NOT K-1's (which is what you will get as an MLP unit holder).

Since MLPs allow investors to defer 80-90% of their personal income tax liability for years, or possibly indefinitely, you probably want to get the help of a competent CPA or tax advisor. In addition to the tax deferred issue, you may be required to file state taxes in the states where your MLP does business (this may not affect you at all unless you are a major player).

But don't let that scare you off. The tax hassle is well worth the benefits! With many MLPs you can earn well over 10% on your money (again with 80-90% tax deferred) in quarterly distribution checks. Where else can you get that kind of return? The unit price (like a rising stock) can add even more to your yield. I'm not a big fan of the buy and hold strategy, but these are investments you may want to hold many years for Rock-Solid income!

Your favorite tax software will walk you through the whole tax issue fairly quickly. MLPs send K-1 tax forms around March 15 (as do LLCs), and the whole K-1 process was recently made clearer by the IRS.

MLPs trade on the major exchanges just like any stock. They can be purchased easily through your online discount broker at the same low commissions you pay to buy any stock.

However, getting information on MLPs can be difficult. Currently there is no official clearing house of information on these little-known securities. You have to do your homework to find them.

Here are a couple ETFs you might look at that invest in MLPs:

JP MORGAN ALERIAN ETF (AMJ)

KYE is a Kayne Anderson fund that holds shares of KYN, an MLP.

Here are a couple of my current favorite MLPs:

Plains All American Pipeline LP (PAA)
Enterprise Products Partners LP (EPD)

Be sure to subscribe to my Email Alerts here at EzineArticles as I will be sharing many of my favorite MLP plays in upcoming articles.

Autor: Doug West

Doug West has worked in Financial Planning and Investment training for over 20 years. Get his No-Cost Audio Report on how you can Secure Your Retirement with Free-Online Tools:

Get your Free Report Here and discover Rock Solid income strategies, including how you may be able to increase your social security check by 50%.

Learn the art of simple Mini-Dow Trading.

Forget day trading stocks and learn how to trade the mini index!

Added: December 1, 2009
Source: http://ezinearticles.com/

A Short Guide on Buying Fixed Annuities

In order to provide for your future income especially for the time you will be retired you have to consider all your options. The financial instruments that come highly recommended for individuals who want to secure a steady income for the times when they will not be able to work are the fixed annuities. Just like with all other securities you have to consider a number of factors and all available options in order to make the most beneficial decision. Here are some essential tips that will aid you in the process of buying fixed annuities.

As a start it is essential to consider the standard features of these financial instruments. You will have to pay a single one-time premium for an annuity. With the standard contract you will incur no other costs whatsoever. The interest rate is fixed and you will be able to calculate your returns. Generally an accurate estimate of the overall return is between 3 and 10%. The main advantage of buying fixed annuities that the financial risk you are undertaking is very low. Also, no management of the funds on your side is required, so you can comfortably rely on a stable and secure income without worrying about the details.

There are two main of types of fixed annuities in terms of distribution models that you can choose from depending on your requirements and financial needs. With the immediate fixed annuities you will be able to receive monthly payments upon the installment of the premium until this sum plus the interest rate are depleted. With the deferred fixed annuities you will be entitled to the payments upon the expiration of the time period of the securities. You will be able to choose from a short, medium and long term instruments.

When buying fixed annuities it is essential to choose a type that best suits your particular requirements. The general rule is that the longer the term of the security, the higher the interest rate. Also, you can expect to get a higher interest rate with deals that offer less flexibility. No one can predict the future with certainty even with the most accurate financial planning. That is why you should take into account the amount of money you want to invest as well as how large your reliable your employment income is. You are highly recommended to allow for diversification when investing your savings. There are other financial instruments that involve different levels of risk, returns and time periods. If you set aside part of your savings for buying fixed annuities and the other for purchasing other securities, you can offset the investment risk substantially.

The interest rate is the most important factor to consider when buying fixed annuities. Since it cannot be changed, it is best to purchase such financial instruments when the percentage is relatively high. At present the interest rates are very low and you might have to wait for a while for the financial markets to recover from the economic blow.

Autor: Mark Alison

Click here for Fixed Annuity Rate information, and buying a Fixed Rate Annuity.

Added: November 30, 2009
Source: http://ezinearticles.com/

Making the Right Investments For Your Retirement

Most individuals out there don't really take the time to plan for their retirement and the ones that do don't start early enough. You can start planning for your retirement early enough in your life and in the end every penny you save counts. Think about it like this, the sooner you plan for your retirement the sooner you will be able to afford not to work or even have the ability to make calculated risks to help your wealth grow.

Planning for ones retirement must start as early as possible. It doesn't matter if you are saving a few dollars a month it all counts. Your savings should also be growing year by year in a way that will satisfy your target down the line. Saving however is not the only step you will need to take so that you have enough money to retire on. You will have to invest your savings as well.

When it comes to investing for your retirement you should opt in to investments that are secure. These investments won't necessarily have the highest return but they will be secure. The stock market should be avoided as well as other high risk investments.

It is vital to plan for your post-retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer earning.

The investments for your retirement must be secure. The last thing you want to see is your hard earned and saved money disappear in a day due to market problems or bad choices. This has been a big problem for people recently with the financial crisis. Playing it safe and investing wisely is the best way to go.

A good investment choice might be mutual funds of low risk. There are several like these out there and you must do a certain amount of research in order to find them. You can also speak to a certified financial planner or an investment advisor so that you can get some advice with regards your investments.

Autor: Gus Smitherson

The best thing you can do before you start investing is to get go through your plan with a independent investment advisor. You need to find someone in your area though. You should find an financial advisor Toronto that knows the specifics and laws of your country.

Added: November 27, 2009
Source: http://ezinearticles.com/

Planning Your Retirement Investments Properly

You have probably heard of the story of the hardworking ant and the well mannered grasshopper. The message of the story was that the ant worked hard all summer and arranged for the coming winter. While the grasshopper played all summer and had no food as soon as winter came. So the moral of the story was that you had to plan ahead and work on the plan. This moral is exactly the same when it comes to planning for one's retirement.

Saving even if it is a bit at a time is the best way to make sure that down the line you will have enough to retire on. Even $10 per month can make a difference in 20 years so the amount doesn't have to be a big one. Setting money aside is one thing however, having that money grow is another thing.

With the interest rates being relatively low it is very important that you invest your savings so that you get some interest. At the same time you don't want to lose any money and thus your investments have to be risk free. Investing for ones retirement must be done by taking the least risk possible.

Generally, the fastest you make a return on your investment the greater the risk. The same goes for return. High return investments presuppose that you are willing to take some kind of risk. Even though a balanced portfolio is something widely recommended when it comes to your retirement funds you must take an approach that is as close as to risk free as possible.

Even though saving an investing small amounts works well in the long run you should consider taking a more aggressive approach. Some advisers recommend that you use 60 per cent of your income to cover your expenses and allocate 40 percent towards your savings and investments. It doesn't necessarily have to be your income it can be any money coming in regardless if it is a bonus, a gift or a prize.

For best results start saving and investing as early as possible. The more you save and invest the better chances you have of living a comfortable life in the future. The best way to do so is to consult a financial planner or an investment adviser to help you with making the right choices in planning for your retirement.

Autor: Gus Smitherson

The best thing you can do before you start investing is to get go through your plan with a investment adviser Toronto. You need to find someone in your area though. You should find an financial adviser Toronto that knows the specifics and laws of your country.

Added: November 26, 2009
Source: http://ezinearticles.com/

Investing For Your Retirement

When I was 23 I met one of the vice presidents of the largest bank in Canada. I worked as a reporter and we met for an interview. After introductions he asked me how old I was. Then he suggested that I should be saving up for my retirement. At the time I was perplexed but after a few years I realized how wise of a suggestion that was.

Planning for your retirement is something that should start very early in life. Saving a bit here and bit there will make a difference after a few years. You can start saving for your retirement from a young age and when you have saved enough you should consider investing that money.

There are many options for someone who is considering investing for their retirement these days. Simply placing your funds in a bank account is not enough and figuring out whether an investment is good or not can take a lot of work.

Finding someone who knows his way around investments to help you with your planning is always a great idea. Professionals like investment advisers or financial planners have the know-how and experience to help you make the right choices for investing for your future.

What you invest in should be something secure. Your savings will be essential for your survival in the future. You have worked hard to save the money and you must make the right decisions when investing it. The recent financial crisis has made the potential risks even more apparent.

It is imperative that you start planning for your retirement as early as possible. With that being said you should constantly save as much money as you can and at the same learn as much as you can about potential investment options. One thing to keep in mind when investing for your retirement is to never prefer risky investments. If you start early then you can have a lot of lea way when it comes to going for slow and study investments.

Autor: Gus Smitherson

The best thing you can do before you start investing is to get go through your plan with a investment advisor Toronto. You need to find someone in your area though. You should find an financial advisor Toronto that knows the specifics and laws of your country.

Added: November 25, 2009
Source: http://ezinearticles.com/

Withdrawal From IRA - Get the Timing Right Before Withdrawing Your IRA

You probably haven't thought about withdrawal from IRA at the moment because you're still young and working. Moreover, you're not bothered because you have saved wisely and you have a personal planr to take care of once you're old and gray. How about when you get sick? Ahh, never mind! Your Medicare should take care of all that. On top of it all, you have your Individual Retirement Account (IRA). But what if there is a sudden financial blow in your life that leaves you with no other option other than contemplating making a withdrawal from your IRA? What do you need to do?

To begin things, a short description of what an IRA is all about is needed. An IRA is a taxed advantage savings plan wherein a member's contributions are placed in custodial accounts at financial institutions, investments and brokerage firms, and insurance companies and mutual funds. IRAs may be tax deductible, depending on factors such as the member's income and coverage of the account.

When to Withdraw from IRA

Withdrawal funds is not something most retirees or even working people paying for their respective IRAs certainly mull over. But just in case, doing so is not an easy process. To begin with, getting back money is a complicated process, being covered by layers of complicated laws; it is advisable to consult an expert on financial activities before making any move. Withdrawal before the person reaches the age of 59.5 means that it will be levied an excise tax amounting to 10 percent unless the withdrawal falls on exception rules such as medical expenses, health insurance, death and disability and education expenses.

Whatever, the reason, going down this route should be made only as a last resort. The three ways below are the most common methods people use in getting money back from an IRA:

• Life-expectancy method. This produces the least pay-out although it is the simplest method. All it takes is to partition the IRA balance every year by the number of years the person expects to live.
• Amortization method. Based on the owner's life expectancy and an interest rate deemed reasonable based on earnings made by the account.
• Annuity-factor method. This is the most complicated of the three processes so much that those contemplating on following this are advised to seek expert help so as to be guided well.

Autor: Dean Sturridge

My name is Dean and I have a keen interest in all financial issues. I run the Loans Website. If you are interested in finding out more information on financial issues then I recommend the following article: Withdrawal from IRA.

Added: November 24, 2009
Source: http://ezinearticles.com/

Retirement Planning - Earn From 25 to 100 Instantly

Many scour the internet looking for the magical retirement investment that can set them up for a lifetime of income. In the mean time, they often overlook one of the best places to start saving for retirement, the retirement savings plan at work.

I worked as an electronic technician for nearly 10 years with AT&T in their Oklahoma City plant. I was shocked at how many coworkers did not put a dime into the 401k plan they offered employees. The company even matched funds dollar for dollar. That is an instant 100% on your money! If one had even a little financial savvy, they would put every dime they could into such a plan.

While I did put in a nice chunk each week, I did not always put in the maximum limit for matching funds. Looking back, I wish I had. There was one young man I worked with who contributed the maximum the whole time we were employed there. After 10 years we were both laid off. While I had about $40,000 in my 401k he had over $70,000 in his (and we were both still in our early 30's). I've often wondered what his account has grown to now, nearly 20 years later.

One thing most young folks do is underestimate the time value of money. You probably have heard the old scenario of how someone who puts $2,000 into their retirement account at age 18, and never contributes another dime compared to someone who waits until they are 30 or 40. The older one would need to contribute more than $2,000 per year just to catch up (even with an assumed modest earnings on the accounts).

So, how do you earn from 25% to 100% instantly on your money? Check into the retirement savings account at work, and if they do match funds, start contributing the maximum amount they allow. Keep in mind that most plans will allow you to contribute over and above the portion that the company will match. So, be sure what that limit is. Often times, for the investment choices they offer, you won't want to invest any more than the matched amount (later you can roll the funds over to a self-directed account, but for now, get all the instantly matched money you can - remember you won't get that kind of instant return anywhere else).

If your company does not match funds, consider getting a job somewhere that does!

Autor: Doug West

Doug West has worked in Financial Planning and Investment training for over 20 years. Get his No-Cost Audio Report on how you can Secure Your Retirement with Free-Online Tools:

Get your Free Report Here and discover Rock Solid income strategies, including how you may be able to increase your social security check by 50%.

Learn the art of simple Mini-Dow Index Trading.

Forget day trading stocks and learn how to trade the mini index!

Added: November 23, 2009
Source: http://ezinearticles.com/