I Don’t Know What To Do…
Here’s The Situation… For 10 or more years you’ve been stuffing money into a qualified retirement plan, (401k, 403b, Etc.) and now you’re ready to switch jobs, ready to retire, or maybe you’re already retired… What do you do with the money that’s in your current plan?
Well, you have three basic options:
1. You Can Leave the Money Where It Is – The concerns with this option: You are required to move the money when you leave; You maybe giving up some control over how your money is being invested; or if you need money in the future, there may be problems gaining quick access to your money.
2. You Can Cash It In – If you cash it in you‘ll have to pay taxes on the entire amount, and if you’re under age 59 ½ there is a 10% early withdrawal penalty.
3. You Can Roll Over The Money Into An IRA This is probably the smartest move for most people…If you roll this money into an IRA you can defer paying taxes on the money, and avoid the tax penalties if you are under age 59 ½.
An IRA is not really an investment, but rather a type of account set up by the IRS tax code. Your IRA can be funded with various investments inside the plan. When you roll your money into an IRA, you’ll need to find the right investments to reach your retirement goals and needs.
What are some of the common IRA Vehicles?
Mutual Funds – You can use a mutual fund as the investment inside your IRA. However, you are investing in the market, and have the risk that if the market goes down, you could lose money.
Bank Products – CD’s and Money Market Funds– While these investments offer you safety and liquidity, there is also the risk that you will have less buying power in the future. This is because you’ll generally receive a low rate of return on your money, and worse, you could lose spending power due to inflation.
Example: A money market account earning 2%. Now subtract inflation @ 4% and your 2% return is – 2.0%. (2% – 4% (inflation) = -2.0%)
Annuities– There are 3 basic types of growth annuities – Fixed, Indexed and Variable.
Fixed Annuity– A Fixed Interest Rate Annuity, pays you a guaranteed fixed interest for a specific period of time. There is No risk of loss, and historically they have outperformed CDs and Money Market Accounts. However, it may not provide as much of a hedge against inflation. (4.5% – 4% (inflation) = 0.5%)
Indexed Annuity– These annuities have the ability to get stock market type returns, without the downside risk. (No Loss of Money) Because they have the potential for higher returns, with safety and guarantees, they can create a better hedge against inflation, so your savings will not lose its spending power!
Variable Annuities– Variable annuities have sub accounts that are much like Mutual Funds. There is a risk of losing some of your money. However, with some of the new riders, for a fee, you can minimize those potential losses.
Annuities can offer you a safer and more secure retirement option – with rates of return that are better than most bank CDs, Savings Accounts or Money Market Funds. And they can provide a hedge against inflation, while minimizing the risks to your investments. The principal drawback is there may be penalties for early withdrawals, and you could lose money. So, it is important to find the one that best suits your needs.
For help or more information, call my office today!
-Napoleon made his battle plans in a sandbox
-The bulls-eye on a dartboard must be 5 feet 8 inches off the ground.
-Minus 40 degrees Celsius is exactly the same as minus 40 degrees Fahrenheit
-The correct response to the Irish greeting, “Top of the morning to you,” is “and the rest of the day to yourself.”
-The term Cop comes from Constable on Patrol, which is a term used in England.
-Iceland consumes more Coca-Cola per capita than any other nation.
-The Jungle Book (1967) The last film personally overseen by Walt Disney.
-Potato Chips Cause More Weight Gain Than Any Other Food
Can the Stock Market
keep going up?
Are you worried about
a market correction?
Double Digit Losses!
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Call my office today!
Your Home for Your Family
We all want to live the Great American Dream. We want the opportunity for prosperity and success, and an upward social mobility for our family and children, achieved through hard work in a society with few barriers. And a big part of that dream has been to own a home free and clear, with no mortgage. Having a roof over our head is one of our most basic needs. Plus, it gives us safety, security, and pride. It would be a nightmare to lose it. So, how do we safeguard our home for our family?
Most people believe the best way is to use a 15-year mortgage to pay off the home as soon as possible. Others say to put extra payments towards a 30-year mortgage. The problem with both of these plans is that until you actually pay off the mortgage, they don’t protect your family against the loss of the home.
What happens if you become critically ill, suffer an accident, become disabled, or lose your job? Where will you get the money to make your mortgage payments?
Consider, if you have been putting all of your money into paying off your home early, then isn’t all your savings tied up in the equity of the home? If you don’t have an income are the banks going to give you a loan to take equity out of your house? Of course not! And the worst part is that it doesn’t matter if you owe $2,000 or $200,000 on your home, if you can’t make your monthly mortgage payments, they are going to foreclose, and take your home. If that happens, then all of those extra payments were for naught. Nobody wants that!
Let me ask you, if you could have a tax write-off, how long do you want it? As long as possible! And, how big a tax write-off do you want? As big as you can get! What is one of your last big tax write-offs? Isn’t it the interest on your mortgage? Does it make sense to not take advantage of this big tax write-off?
What if you could put money in a separate account that would grow so you can pay off your home faster, while maintaining the tax write-off as long as possible? On top of that, what if your money would grow tax free, and had no government restrictions on how much you can contribute to it, or penalties for withdrawals. What if that money could be used for other financial priorities like replacing lost income, funding your retirement, or funding your child’s education? Finally, what if it was a self-completing plan that would protect your family against death and disability? Would that be a dream come true?
“It takes as much energy to wish as it does to plan.”
~ Eleanor Roosevelt
You always hear doctors advising to drink more water. Here are 8 startling facts about water.
1. 75% of Americans are chronically dehydrated.
2. In 37% of Americans, the thirst mechanism is so weak that it is often mistaken for hunger.
3. Even MILD dehydration will slow down one’s metabolism as much as 3%.
4. One glass of water shuts down midnight hunger pangs for almost 100% of the dieters studied in a U-Washington study.
5. Lack of water is the #1 trigger of daytime fatigue.
6. Preliminary research indicates that 8-10 glasses of water a day could significantly ease back and joint pain for up to 80% of sufferers.
7. A mere 2% drop in body water can trigger fuzzy short-term memory, headaches, trouble with basic math, and difficulty focusing on the computer screen.
8. Drinking 5 glasses of water daily decreases the risk of colon cancer by 45%, plus it can slash the risk of breast cancer by 79%, and one is 50% less likely to develop bladder cancer.