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Learn... Plan for Retirement... Save... Millions!

Steps to Build Plan
  Step 1 - Define goal
  Step 2 - Gather data
  Step 3 - Get educated
  Step 4 - Assess situation
  Step 5 - Develop plan
  Step 6 - Make changes
  Step 7 - Get help
Tools
  Retirement Calculator (Html)
  Life Expectancy Calculator (Html)
  Retirement planner (MSNMoney calculator)
  Retirement planner (MSNBC calculator)
  CNNMoney's Asset Allocation Wizard
Investment Plans
  Employer Plans
  Pensions
  401(k)
  403(b)
  Roth 401(k)/403(b)
  457(b)
  Keogh
  Simple IRA
  SARSEP-IRA
  SEP-IRA
  Federal Plans
  Military Retirement
  CSRS/FERS Plans
  TSP
  Other Investments
  Personal IRA
  Annuities
  Stocks
  Bonds
  Mutual Funds
Bonds

Bonds are a form of investing that can generate earnings through what basically amounts to a loan that you and others are making to a company or government agency. One of the oldest ways to invest, a bond certifies that the issuer (the comapny needing the loan) has borrowed a specific sum of money and needs to repay the principal and interest to the bondholder (you) by a certain date.

Bonds tend to be more predictable than other investments because the term and the interest rate are known at the time of issuance. Many investors include bonds in their portfolios to provide diversification and balance, and thus reduce the risk. The main attraction of bonds is that they provide a source of fixed income for a defined period of time. If you hold a bond until its payoff date, then you typically will not lose your investment, and you will have earned the stipulated interest, unless the company defaults on the loan.

Bonds that are held as part of a mutual fund can lose money if the fund manager decides to sell the bond before its maturity date. This is usually done when interest rates rise, making it desirable to own the new bond which pays more interest. Unfortunately, they must sell the old bond at a loss (called a discount), and therefore some principal is lost.

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