Archive for August, 2009


401K Rollovers (Gimme My Money Back)

Filed Under: Personal Finance by Bill — 3 Comments
August 19, 2009

So you’ve been working at your company for awhile putting some money away into the 401k, having some money matched into a 401k ,and maybe even having a separate profit sharing investment account that you have some vested money in.  Since you left this company (hopefully for something better) why would you leave your money in their accounts?  Not only will it be hard to keep track of, but odds are they get some benefit from who they have managing their 401ks, don’t support them any longer.  It’s time for your 401k rollover. 

401K Rollover Options

  1. 401k Rollover To IRA (Individual Retirement Account) - What’s great about this option is it’s flexible.  In a brokerage IRA you can invest in anything that’s allowed to be traded in an IRA.  Anything from mutual funds to stock options the choices are yours.  The bad part is if you’ve new to investing you can kill yourself on over trading and too high of commissions.
  2. Rollover To Mutual Fund IRA – This is good because often the commissions are very low since you’ve locked your money in with that one mutual fund company.  If you’re looking for a low stress retirement savings this is the way Dave Ramsey would likely recommend.
  3. Rollover To New Company 401K – The best reason for this is if you don’t have much money you are rolling over because your new company 401k won’t have any account minimums.  It’s also good if you have a really hard time keeping track of your accounts as it is.  I don’t like how locked into few choices it generally gives you unless you are now working for one of the mega corporations.

As for 401k rollover rules I don’t dare bore you readers with legalistic rules that will change by the time you read this anyways.  So please check the rules and forms of where you are rolling over from, then check the rules and forms of where you are rolling over to, then check with you tax adviser (because my lawyer says so.)

There are minor difference is withdrawal rules between a 401k and an IRA to consider especially if you’re near retiring so keep that in mind as you make your decision, though it will be very unique to your situation.

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Debt Consolidation With A Home Equity Loan: Some Facts

Filed Under: Personal Finance by Bill — 9 Comments
August 17, 2009

There are various reasons why people fall into debt. They might have plenty of medical bills or might have maxed out on their credit cards since they don’t know how to use them prudently. No matter what the cause is, your paycheck is being utilized for various payments and if you’re only making the minimum payment on your credit cards, then it would simply take a long time to eliminate those debts. The interest payments for your credit cards are not tax deductible; hence it is sensible for you to go for debt consolidation

  • Sit down and enumerate all your outgoing payments. Take into consideration your credit card balances, other unsecured debts and the amount of salary that you get. By consolidating a number of small bills into a bigger bill, you can save up to thousands of dollars.
  • If you’re looking for ways to eliminate your credit card balances and are thinking about taking out a home equity loan, keep in mind that the interest payable on the loan is tax deductible.
  • The amount of repayment for a consolidated loan has to be lower than the aggregate amount that you’re paying. It is simpler to handle one bigger bill than multiple smaller bills.
  • Prior to getting into a contract with either a mortgage lender or any other financial institution, you should go through the agreement carefully. Make sure that there is no prepayment penalty to be summed up with the bill if you pay it sooner than the stipulated term of your agreement.  
  • If the mortgage lender provides the facility of online payment, then it is the simplest means to pay off your loan.
  • Debt consolidation should be considered as a useful way to save money. If you get into a contract that permits you to merge multiple bills into a single bigger bill, you’re saving money every month. You can utilize that additional money to paying off your consolidated bills. Inquire whether the lender has any difficulties with making extra payments for your account.
  • Keep in mind that if you opt to consolidate your debts with a home equity loan, the minimum term of repayment is 15 years and the interest is tax deductible. This assists you in filing your tax returns in the beginning of the year.             
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