Archive for the ‘Financial Balance’ Category

401k, balance, retirement, john navin

401k Changes are not as hard or scary as you may think

Do you really want to leave your 401k money with your old employer?  More than likely not.  But, a lot of people choose that route because they “don’t have to think about it then”.  If you are going to make some changes, here are a few things to remember.

What is a 401k Rollover?

The transfer of assets from an employer’s retirement plan when you leave your employer – whether retiring or changing jobs.

What are my Options?

  • Leave the assets in the employer’s plan (if the plan allows – this is not always a possibility) – This limits you to the rules and investment options in the former employer’s plan.
  • Withdraw the assets in cash – Because this distribution is considered taxable income, taking a distribution in cash usually has tax consequences, such as a withholding of 20% and a possible 10% penalty if you are younger than 59 ½.
  • Rollover to a new employer’s plan – subject to the rules and investment options of the new employers plan.
  • Open a Rollover IRA – You can move eligible assets directly from a retirement plan to a Rollover IRA. The advantages of Rollover IRAs include:
    • Preserving tax advantages – Eligible assets can continue to grow tax-deferred.
    • Potentially more investment choices – With a Rollover IRA you can invest in stocks, bonds, mutual funds, annuities and more.
    • Flexible beneficiary designations and stretch-out options for all beneficiaries through an inherited IRA account.
    • Easy access to you assets – You can withdraw money at any time from a Rollover IRA. Distributions will generally be subject to current taxes and a 10% penalty if they are younger than 59 ½ (unless an exception applies).

Take a few minutes and understand your options.  Most people I talk with would rather have their money invested in their own account, than have it stay with an old employer they may not particularly like.

Did you find the rollover process easy?

Read Full Post »

Make decisions when you are comfortable

What a traumatic time, mourning the loss of a loved one.  Soon to follow will be the financial decisions make, often creating even more stress. 

It is critical that your options be thoroughly explained to you, seek help from a trusted advisor before making any decisions.

You have a few options:

  • You can Rollover the balance of the funds to an IRA without incurring a tax liability. You may continue the tax deferral on future growth until you reach age 70½. At that time you are required to begin taking regular annual withdrawals.
  • Depending on your age, you may want to take the distribution as an income stream based on your life expectancy.
  • Keep the account in deceased spouse’s name, allowing for stretch in the future.

Take your time in making decisions, rarely is there a critical time crunch to get this done.  Year end tax planning would possibly be one of the reasons to move a little quicker, but don’t be pressured into making decisions until YOU are comfortable.

Invest in Balance

Read Full Post »

Ben knew the value of $1 saved

In 1790 Benjamin Franklin left $4,000 jointly to the city of Philadelphia and the state of Pennsylvania. He left instructions that the money should be conservatively invested, but not withdrawn, until 200 years after his death.

In 1990 this fund had grown to $1,500,000. The Pennsylvania State Legislature distributed the assets of the fund to several charitable foundations, including a scholarship fund for the students of Penn College.

Because of his remarkable foresight and planning, Benjamin Franklin continues to benefit thousands of lives even though he has been dead for more than 200 years. Franklin understood the interrelationship between time, money and compound interest.

His lump sum investment of a mere $4000 earned a modest 3.00% return, yet his money increased to $1,500,000 – 375 times the original value.

The road to security and increased wealth is not a “get rich quick” concept, rather prudent wise decisions.

What can you do to increase your savings?

Invest in Balance

Read Full Post »

Get to the cake anyway you can!


The title of this blog may draw in some of my friends seeking weird pictures, a stupid story or crazy memories of birthdays past. Sorry to report this is not such a post, but rather important years we need to remember as we age (I will tell stupid stories of birthday’s past, just not today, even though they be more interesting to some than the content below).  A few birthdays in your future will have big impact on your financial life.  Beginning at age 59, there are several key birthdays that can affect your tax situation, health-care eligibility, and retirement benefits. 

59½ — You can start taking penalty-free withdrawals from IRAs and qualified retirement plans, provided certain conditions are met. Ordinary income taxes generally apply to these distributions. (Withdrawals taken prior to age 59½ are subject to a 10% federal income tax penalty.) 

62 — You are eligible to start collecting Social Security benefits, although your benefit will be reduced by up to 30%. To receive full benefits, you must wait until “full retirement age,” which ranges from 65 to 67, depending on the year you were born. 

65 — You are eligible to enroll in Medicare. Medicare Part A Hospital Insurance benefits are automatic for those eligible for Social Security. Part B Medical Insurance ­ben­efits are voluntary and have a monthly premium. To obtain ­coverage at the ­earliest possible date, you should generally enroll about two to three months before turning 65.1 

70½ — You must start taking minimum distributions from most tax-deferred retirement plans or face a 50% penalty on the amount that should have been withdrawn. Annual required minimum distributions are calculated according to life expectancies determined by the federal government. 

1) Social Security Manual, The National Underwriter Company 

A story of one of my unforgettable birthdays will surely follow, in the meantime these milestones may help keep your financial world up to dat.

Read Full Post »

An Individual Retirement Account (a traditional IRA) is a tax-deferred personal retirement fund. You can contribute up to $5,000 a year or $6,000 if you are age 50 or older. Depending on how much you earn and your marital status, the money you invest may be tax-deductible (deductible IRA) or not (non-deductible IRA).

Some types of IRAs include:

  • Traditional IRA
  • Roth IRA
  • Education IRA, now called Education Savings Accounts

Traditional IRAs are either Regular or Rollover IRAs.

Note: Your thrilled to know that IRAs grow tax-deferred until you take the money out at retirement or after 59 and 1/2 .

Link to the IRS site for more information http://www.irs.gov/retirement/participant/article/0,,id=188232,00.html

The question today–are you still putting money into an IRA?  Finding a lot of folks struggling to make it happen these days.

Invest in Balance–BALC–Believe, Advise, Lead, Capitalize.

Read Full Post »

Get your car paid for well before it looks like the Beverly Hillbillies!

Paying off your car doesn’t have to take a lifetime.  With auto loan companies allowing you to borrow money on your car for 8 years, it may seem like a lifetime.  Beat them at their own game, take back control, and own your car before you are driving down the street like a Hillbilly!  I know, most of the cars don’t even rust that much, because they are plastic…I was trying to get your attention!

Now that I have your attention, the 7 quick tips to paying off you car:

1.  Talk to your bank about your current interest rate.  In case you haven’t heard, we are in a bit of a recession.  Interest rates are falling and banks are losing money to credit default.  They are more open now than ever before to discuss your interest rate.  They would rather discuss your rate than lose you as a customer.  But, you have to ask, they aren’t coming to you!

2.  Look at your current spending plan AKA Budget.  I know a dirty word.  Look for areas that you are spending that you don’t need to.  Change!  Stop going out to lunch twice a week and brown bag it.  That will save you about $20/week.

3.  Take the extra money you just found and apply it to your principle on your loan.  An extra $80 a month is probably increasing your payment by 30%, thus paying off quicker and reducing your amount of interest you paid the bank.

4.  Track your progress and celebrate.  You must write down how much extra you are paying!  Why, so you can go back and realize what you are doing.  It won’t seem as if your effort is making any progress.  IF you can’t see it, you can’t track it, and you won’t FEEL it!

5.  Visualize how you will feel when paid off.  This will go a long way when you are brown baggin lunch and everyone else is going out to eat.  You are going to feel great, stress free, peace, confident and happy that you paid off your car!

6.  DO NOT pull out your 401k and retirement investments.  You are saving those for the future.  The cost is also astronomical to do so!  IF you pull out of IRA to pay something off, and you are under 59 and a half, it will cost around 33% in taxes and penalties….not a good idea.

7.  Invest the money you saved on your car payment for something you really want.  Now that you have this extra $505 each month ($80 from baggin lunch, and $425 car payment) keep saving it.  You can start to put pictures up of the glorious vacation you are going to take, or the trip to see the kids or grand kids, dinner out at a NICE place…you get the point!

Take a step, you can do it.  Invest in Balance!

What one step can you take today to help you reach your goal?

 p.s.  If you found this beneficial, keep it to yourself and don’t tell a soul, they don’t need any help either.

Read Full Post »

%d bloggers like this: