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Number 5 defeats #1. If you roll it over into an I.R.A., the money becomes vulnerable to creditor claims. No, thanks, I'll just leave my money in the 401(k) and draw from it directly.
Never, never again...and #5 suggestion to lose your home to foreclosure, rather than take money out of your 401K is the most inane suggestion I've ever read! In his early 50's, my husband became seriously ill and was out of work for 2 years. I worked, but was hardly the "bread-winner". In order to save our home, pay utilities, make car payments, insurance, et al we had to withdraw all our 401K savings over that 2 year period ($100,000).
We were hit with the penalty fees and income taxes at astronomical rates and wound up with $70,000-$80,000). Sounds like a lot for 2 years, but that was HALF of what we were used to and our expenses reflected what we were used to earning. We got through, saved our home, cars, and kept the bills paid. The house and cars are is now paid off. The house value is DOUBLE what we had in the 401K. A much better "investment".
The government PENALIZES those who don't arbitrarily declare bankruptcy and feel honor-bound to pay creditors what they owe. Apparently, this author feels you shouldn't be responsible for your debts, as well.
We would have been better off to take every dime we saved over the years and just put it in a savings account. Then, when bad things happen, the money is YOURS...not the government's. That's what we're doing now. As I said...NEVER, NEVER again.
Hey you dopey liberal obama supporters......here is a cut and paste....from a Drudge Report article...is this the kind of government you signed up for?....Is this the kind of thing you support?
A government-contracted security force threatened to arrest doctors and nurses if they divulged any information about the contagion threat at a refugee camp housing illegal alien children at Lackland Air Force Base in San Antonio, Texas, sources say.
In spite of the threat, several former camp workers broke their confidentiality agreements and shared exclusive details with me about the dangerous conditions at the camp. They said taxpayers deserve to know about the contagious diseases and the risks the children pose to Americans. I have agreed to not to disclose their identities because they fear retaliation and prosecution.
The "72t" provision that allows penalty free withdraws after 55 but before 59 1/2 needs to be changed!!! It requires that you make the same withdraw for 5 years time EVEN if you only need $$$ for a single year extraordinary expense and don't need 5 years worth of funding. THIS STINKS!!! If you can prove that you are truly retired and have no earned W-2 income for any year after 55, withdraw of IRA/401/403 etc. funds should be penalty free!
Write your worthless representatives in Congress and advocate for this change! It could make a big difference in tax savings some year if you're able to retire early!
Also, if you go to a "sales pitch" by anyone who claims to be a financial advisor/retirement planner, ask them about 72t strategies for retirement, and if they give you a blank, enjoy the meal and run in the other direction!!!
Originally, one could only apply SEPP to IRA but the rule has been amended to include 401(k) money as well. You CAN apply SEPP to IRA anytime, you can only apply SEPP to 401(k) so long as you leave service on or before age 55.
It's all outlined in Internal Revenue Code (IRC) Section 72(t)(2)(A)(iv)
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[BRIEFING.COM] The major averages ended the midweek session on a flat note after spending the day inside narrow ranges. The S&P 500 hovered near the 2,000 mark for the majority of the trading day, but slumped to new lows during the last hour of action. The index then returned to its flat line, where it settled for the day. For the third day in a row, participation left a lot to be desired with just 487 million shares changing hands at the NYSE.
Equity indices opened with slim gains, ... More
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