The following are just a few of the common questions and misconceptions we hear every day from consumers confused about basic facts related to investment decisions. As part of our Investment Basics series, we’ve provided a brief educational response below, along with links to access additional information to discuss with your advisor or plan provider.

The more you know, the better you’ll be able to work  together to determine an appropriate strategy for your unique situation. This simply provides a foundation to begin your dialog.

• I should sell during a bear market, right? — A bear market, when there’s been a sharp drop in stock prices, could be the worst time to sell. Remember, you only lose money when the stock market drops if you sell during that time. Smart investors typical buy when the market is down since they are able to purchase more shares for less money. If you have the time, discuss with your advisor about letting the market rebound once again before you See Buy-Sell-Hold Pros & Cons to learn more.

• I’ve heard a mutual fund is a safe way to invest. True? — It can be, as opposed to trying to select individual stocks or bonds. There are many excellent mutual funds available today. A major benefit of mutual funds is that they include multiple investments to help spread the risk if one or more does not perform. It’s essential to remember that not all mutual funds are created equal; some mutual fund managers select bad options, include so many investments that the good  performers are diluted by all the bad ones, or charge high fees.

• In a recent workshop, a well-known financial personality stated that investing in a fund with an up-front load offers better returns. Is that true? — A load is a sales charge paid on the sale of a mutual fund. Many common funds have front-end or back- end loads, as well as no-loads (no sales commission). Historically, there’s no evidence that a fund with any type of load is going to outperform a no-load. It’s important to evaluate the individual fund itself, the costs (sales fees and other expenses), and its historical return to select the best solution for you. See No-Load vs. Load Funds for additional information.

• My advisor says I need $1 million to retire comfortably. I doubt I’ll be able to save that much, so why bother? — You’re not alone feeling overwhelmed by this seemingly insurmountable goal, but don’t despair. The actual number retirees will need will be different for everyone, and will depend on when and where you retire, and what type of lifestyle you’ll want to. There are so many ways to cut costs in retirement, but obviously, the more you have, the greater your options when you get there. The key is to begin saving more now…regardless of your age!

• I heard that I have to begin withdrawing money from my IRA at age 59½. Is that true? — No. According to gov, you can begin withdrawing money as early as 59½ (or earlier, under certain exceptions), but you’re only required to begin withdrawing money from your retirement accounts at age 70½.

• My Realtor said that buying a home is the fastest way to increase wealth. Is that correct? — While there are many personal benefits and even tax benefits of owning a home, with the sluggish growth in home values in recent years, whether it’s the best investment will depend on your age, other retirement savings, risk tolerance, property values, and the overall housing market in your area.

• I’ve heard my investments in equities should equal 100 minus my age. Is that correct? — Every situation is different of course, but this old formula has generally been replaced with “120 or 110 minus your age” as the percentage of investments in equities. The reasons for this change are that workers are retiring later, living longer, and needing to make up for inadequate retirement savings levels. When determining how much of your investment portfolio to have in equities, it’s also vital to consider your risk tolerance, what’s happening in the market, and how soon you plan to retire. See Is 100 Minus Your Age Outdated? or CNNMoney: Asset Allocation by Age.

• I get confused when I hear about mutual fund asset classes. What’s the difference? — The biggest differences between Class A, B, C, etc. are the expenses or fees they charge…and when the fees are charged. Generally speaking, Class A shares will typically have front- end sales charges, and Class B may defer the charge until you sell the shares (depending on how long you hold them), but these charges will typically fade away the longer you hold theClass C may charge a fee if you sell your shares within a year, but the management fees (charges you pay every year) may be higher than they are in Class A shares. This tends to make the overall costs more if you hold the shares for an extended time period.There are exceptions — and possible discounts for larger quantities — so be sure to discuss fees and options with your advisor, and see FINRA: Mutual Fund Classes for more information.

• As college costs continue to rise, it’s probably better to save for college for our two grade school children than save for retirement, right? — While both are worthwhile goals, all most Americans will have to support them throughout their retirement years is what they send ahead. In other words, your children can borrow to pay for four years of college, but there’s no loan program that will cover 20 to 30 years of retirement. Ideally, you can do both, but it’s critical to protect your retirement security first. Discuss these options with your advisor, and see U.S. News: Pay Yourself First for additional details when making your decision.

• My husband (a veteran) and I — both in our early 30s — have each contributed a total of $27,000 in two Roth IRAs to use for a down payment on our first home. Can we withdraw the money without a penalty or paying taxes on it? — Yes, you can withdraw the contributions made to a Roth IRA at any time, for any reason, without paying a penalty or taxes on the withdrawal. Plus, you and your husband can withdraw up to $10,000 each of earnings for a first-time home See Roth IRA Withdrawal Rules for more details. Another strategy to consider: Talk to your advisor, as well as a mortgage lender, about a zero-down VA loan to see if this might be a better alternative so the money in your Roth IRA can continue growing until retirement.

• I’m planning to retire in five years, but still have over $55,000 in student loan debt. The government can’t garnish my Social Security checks, can they? — The answer to this question is: It depends. First, the only way the government would garnish your Social Security (including disability) checks for student loan debt is if the loans go into default (per the Debt Collection Improvement Act of 1996). Then, they can take a percentage of your check until the balance of the loan has been paid or the loan is no longer in default. This policy only applies to federal student loans; private student loan lenders cannot collect unpaid balances by garnishing Social Security checks. See the Social Security Handbook for additional

• What is a Form ADV and why is it important? — This is a required form that discloses information that a Registered Investment Advisor (RIA) is registered with the Securities and Exchange Commission (SEC), and will give you valuable information on an advisor. See Investopedia: Form ADV for the information included on this

We hope this information will help broaden your knowledge and build the confidence to discuss these issues with your plan provider or advisor as you map out a positive strategy for retirement and other goals.