October 27th, 2011 | Tags:

While many Americans have valid reasons for raiding their 401(k) during their working years, these early withdrawals can have dire consequences in retirement. Fees and penalties for early distributions can further eat away at your retirement account balance. About 15 percent of 401(k) participants spend some of their nest egg before they’re ready to leave the workforce, according to new Government Accountability Office report. The study identifies 3 major ways money leaks out of 401(k)s before retirement and how much each one affects your financial security.

Cashouts

When you leave your job you are given an opportunity to cash out your 401(k). American workers took about $74 billion from their retirement accounts when they job hopped in 2006. But when you cash out a 401(k), typically 20 percent of your account balance is withheld by your employer to pay for federal and state income taxes now due on the amount withdrawn and account holders under age 59 ½ must also pay a 10 percent early withdrawal penalty.

401(k) participants who voluntarily cashed out their entire account balance at the time of job separation experienced a larger reduction in their retirement savings over their career than any other type of 401(k) withdrawal, GAO found. For example, a 401(k) participant born in 1970 who began saving 6 percent of his pay annually for retirement at age 21 plus a 3 percent employer match would typically accumulate $588,049 by age 65, according to GAO calculations. But if that same participant cashed out his nest egg at age 35 when he changed careers and paid the resulting tax penalties, he would have only $404,431 at retirement age. And that’s assuming he immediately gets a new job and saves the same amount with an identical employer match, which could be difficult for a laid off employee to do.

Hardship Withdrawals

Some 401(k) plans also allow current employees to use some of their retirement stash to pay for a sudden bill. Withdrawals are typically limited to the employee’s contributions to the retirement account and do not include income earned on the savings. Allowable reasons for a hardship withdrawal include medical care, payment of tuition or other education expenses, purchase or repair of a primary residence, to prevent forclosure or evection, or funeral expenses. Americans took $9 billion from their retirement accounts for these expenditures in 2006.

Hardship withdrawals had the most negative impact on young and low-income retirement savers, GAO found. A low-earning 35-year-old participant who took a $5,000 withdrawal generally ended up with 12 percent less in savings at retirement resulting from the hardship, whereas higher-earning participants who withdrew the same amount had only 5 percent less at retirement age due to higher contribution amounts, GAO calculated. 401(k) participants are typically not allowed to contribute to their account again for 6 months after a hardship withdrawal, which makes replacing the savings even more difficult.

Loans

Retirement savers are generally allowed to take a 401(k) loan of up to 50 percent of the vested account balance or $50,000, whichever is less. The amount withdrawn must be paid back with interest. If the loan is not repaid, the outstanding loan balance becomes a taxable distribution of income and, if under age 59 ½, the borrower could also face the 10 percent early withdrawal penalty. If you are laid off or otherwise leave your employer, the loan balance typically becomes due in full shortly after the separation. Some plans also require loan recipients to pay loan origination fees or maintenance fees.

Americans lost $561 million in retirement savings due to loan defaults in 2006. Yet, loans paid back to the plan in regular installments are the least damaging way to tap your 401(k) early, GAO found, because participants who do make the payments are able to recover most of their losses.
Copyrighted, U.S.News & World Report, L.P. All rights reserved.

About the Author

Emily Brandon is a reporter for US News & World Report, specializing in Retirement Issues.

October 26th, 2011 | Tags:

The best personal budget software shows you how to get a grip on personal finances while you still can. The right software and accounting programs makes moving in the right general direction far simpler than struggling without it. Here are tips for getting going and choosing the right package for your needs.

Online Accounting Software

Web base software may be worth a look. The most obvious reason it makes sense is it makes putting all your financial info in one spot. That way you can look at everything all together and see what’s happening at one location. That lets you skip entering piles of information manually which may not get done anyway…

Free May Be The Best

No cost software often comes with a catch. In some way it’s limited or requires extra work from you or worse. Look out for limits that may mean a dead end, tasks that must be done but can’t be done.

However there are actually free options for personal finance software that works so well, it’s hard to find any negative users. In addition, one of the most powerful software companies offers an online version for free that gets better reviews than the costly paid versions. Here’s the catch… The free edition offers up money saving ads. If you buy, they get a commission.

Maybe You Need Budget Help Instead of More Accounting

The emphasis sometimes is completely on the budget. That may be all that’s needed.

Some users find little budget progress with typical accounting software. Many nice reports do not success produce. It may be that tapping into a user forum with some budget products may be worth more than the software. That’s available with several of the inexpensive software programs both online and offline.

Beware the Learning Curve

If you need some heavy accounting power, you often can buy it for just a little investment. The problem is that the powerful home accounting software often comes with a large learning curve. If you have a small business or rental property you likely need some serious accounting power. Otherwise leave the powerful accounting packages to somebody who really must spend the hours it takes to learn a system.

Keeping It Going

Consider personal accounting software that just about runs itself. That means all your information gets updated automatically with no action required on your part. Then think about an alternative where you must manually enter every transaction and must collect the data from several sources for yourself. What a contrast, and that’s exactly the difference in software packages.

If possible, go for the low work solution and forget about lots of manual work. Think about that.

Luckily the cost for many of the very best programs is nearly nothing. In a few cases, the software is free. There is a catch, but not a big one.

Personal budget software can help you get control of your finances and more.

About the Author

Grab more tips for choosing the best personal accounting software at another of our articles.

Visit our article and see how to get home accounting software for no cost or possibly you don’t want the free versions.

October 25th, 2011 | Tags:

A partner not being aware of a debt problem with a spouse or a lover is really not as uncommon as you may think. For the older generation certainly, we find that many ladies come to us ashamed to tell their husbands that they have racked up debt. They have been brought up generally to only buy what they could afford. They were the post Second World War generation, who lived with ration books etc. They may well have been given a house keeping allowance to provide for the family on and were expected to manage.

Times changed and with it, the availability of credit to buy all those modern necessities which fill every home. Suddenly, one didn’t have to wait weeks or months for an item. It could be bought then and their on credit and paid off later.

We have had our fair share of married women come to us with debt levels in excess of £50,000 on the verge of suicide. We tell them all they are not alone. Thousands like them seek advice every week.

The Halifax have published analysis which reckons that there are over 200,000 credit cards being used in the UK which a spouse is unaware exists. Now debt kept from a spouse is not necessarily a bad thing. We all need a little me time and money, and it is nice to be able to treat someone with something that we have bought from our own money.

Debt withheld from a partner can be an issue however, when that debt impinges on the money it then takes to service that debt each month and how that in turn affects the finances available to meet all other commitments. The danger here is that further credit is taken out to finance old credit. The net effect is that the problem just escalates, sometimes until it is too late.

It is always worth bearing in mind that if you think that your partner may have an issue with the level of debt your are carrying, then it may be that that debt level is too high.

You need to give consideration also to the question of jointly applied for credit. If you get to the stage, when you need to first or further apply for joint credit, your debt position will come into the open, and you need to be prepared for this. At Help With Debt we have helped people in just this situation.

Remember that debt in your name cannot be collected from another party unless they are jointly liable on the debt or have guaranteed it. However debt owed by you can be collected from or secured against your share of a jointly owned property, and this may have implications on how your partner is able to deal with their share of that property.

If you have a debt issue that you feel you cannot discuss with your partner, we would be happy to talk to you about it. A problem shared could well be the start of a problem halved.

About the Author

Steve Thatcher is the owner of Help With Debt and can be contacted on 0808 160 5577 or at enquiries@helpwithdebtuk.com. Follow him on twitter @helpwithdebt and view the website at http://www.helpwithdebtuk.com.
Debt problems of any nature but especially bankruptcy and corporate debt are specialities.

October 23rd, 2011 | Tags:

For responsible workers a 401 K plan is very beneficial when it comes to retiring. These options are relevant to the self employed as well. There are many ways to save for retirement while self employed. There are services that create investments for self-run companies and let them make a certain percentage of contributions from their earnings to the 401 K plan. By having a self employed 401K plan business owners can make contributions meaning better tax deductions and lowered taxable income. It also includes loans without taxes, tax deferred growth, flexible contribution levels that correspond with the cost of living adjustments, as well as a lower cost compared to traditional 401 K plans. The self employed 401 K plans are most beneficial to business owners who do not have full time employees or run the business with only a spouse. If the plan assets exceed 250,000 the IRS form 550 needs to be filed every year and if any full time employees are hired out the business owner most revert to the traditional retirement plan.
The SEP IRA is another retirement plan that benefits the self employed. The SEP IRA contribution limits are 49,000 which are 100 tax deductible from personal income that is part of the plans appeal. It also has flexible contribution levels and requires very few acts of administration from the business owner. The SEP is a more realistic choice when a business owner wants to contribute 25 of their W-2 earnings or 20 of net self employment income. This is good to have if you dont plan on needing a loan for your business.
When it comes to choosing a retirement plan it is important to compare your options. It is also important to keep in mind that you can easily convert from a SEP IRA to an individual 401 K plan when your needs change and you want a higher contribution limit or you are planning on taking out a loan. Either way the options are readily available for the business owners who do not have full time employees or manage a business with just their spouse.

About the Author

The author has spent a lot of time learning about self employed 401k plan and other related topics. Read more about sep ira contribution

October 22nd, 2011 | Tags:

Motorcycle purchase is a great investment for the persons from mediocre economic class. The assumption that there is no threat to a property is absolutely wrong. Insurance is the best safeguard for any sort of property or asset. But for a person with middling income, motorcycle insurance simply adds to his burden. Therefore, it is a suggestion for them to have affordable motorcycle insurance.
Motorcycle is such a thing that runs mostly at risk when on move in the streets. At the same time, it is true that the job to find out affordable bike insurance schemes is quite difficult. But, you need to spend time and make efforts to get yourself an affordable motorcycle insurance plan. Here are some tips to help you out –
You had shopped around when you were to buy a motorcycle. Likewise, this time too, you should step out to look for cheap motorcycle insurance quotes. Compare the quotes side by side and choose the best of them to insure your motorbike. A little bit of online research will get you the best and affordable premium offer.
Many affordable motorcycle insurance schemes are eyewash. The providers of these insurance policies claim to get you the best of your motorcycle insurance purchase at giveaway prices. You need to have a sharp eye to look into the schemes and their write-ups before making a purchase. It will prevent you from being deceived.
Consulting an insurance market expert is an idea that is sure to click. The expert can help you determine what kind of affordable motorcycle insurance you do need, which insurance type would suit your budget and what coverage options you can have with an insurance scheme. If you lack market knowledge, make it a point to consult an expert.
Don’t forget to review the coverage options while comparing several affordable motorcycle insurance policies from different providers. The coverage options of an insurance plan may not match what you need to have for the protection of your motorbike. Look out for such a motorcycle insurance policy that costs less but offers more.
Higher deductible will minimize the motorcycle insurance premiums for you. Then why not going for it. It implies that you will pay the amount if you wish to make an insurance claim. On the other hand, if you deposit the deductible amount, it will save on the affordable motorcycle insurance premium in the long run.
Get coverage options for your motorcycle adjusted to determine the volume of your monthly premium. Go online to have an affordable motorcycle insurancequote that comes with facility to adjust the coverage levels with your premium. Nothing is easier than this way to get a cheap motorcycle insurance policy.
Among affordable motorbike insurance schemes, the mentionable is Harley motorcycle insurance . It is a good choice for everyone. Everything about this insurance, be it coverage options, monthly premiums or conditions is suitable for the motorcycle users. Make sure to handpick the Harley motorbike insurance from many, if you don’t want to burden yourself with huge monthly premiums.

About the Author

Danieal smith has faced a lot of hazards while buying affordable motorcycle insurance. For hazard free auto insurance & Harley motorcycle insurance he recommends to visit the http://www.sunsetplazains.com/.

October 22nd, 2011 | Tags:

Due to the high numbers of competitors in the market today, getting a car loan isn’t as challenging as it used to be. Second chance car finance is obtainable to those with bad credit, bankruptcies, and repossessions. Getting a bad credit car finance loan is a great way to purchase a new or used vehicle, but good auto loan rates however, do require specific criteria.

The most important criteria that lenders are looking for when it comes to second chance car finance is verifiable income. Verifiable income means that lenders will require proof of income by requesting documents such as tax returns and bank statements. Current residential address will also be necessary to provide to the lender.

The determination of the loan rate is decided based on the type of car the loan will be used to purchase, the borrower’s personal credit history, and the timeline of the loan. Car financing can be obtained using direct or indirect financing. Direct funding is when a loan is received from a financial institution such as a bank or a non-traditional lender. Approval is based is for a specific amount and a voucher is given to purchase the car of choice. Indirect funding is when a loan is through a car dealer. When a car is decided on, the dealer works with a financial institution to get approval for the amount of the desired car.

When looking for second chance car finance, it is also important to decide on a secured or unsecured loan, and more importantly to know the difference between the two. A secured loan is where the lender is given the rights to a portion of a specific property, usually a home, as collateral for loan payments. If the borrower fails to make payments, the lender can repossess the home or property. These types of loans generally offer lower interest rate and can have the option of extending the repayment period. An unsecured loan is a loan that is not tied to any piece of property or real estate. These types of loans are more costly because the lender takes a higher risk of not being paid back. An example of an unsecured loan would be a credit card.

Getting a good rate on a car loan requires the best mix of all the requirements lenders are seeking in a borrower. However, when all points are not met exactly, indirect funding or an unsecured loan could be the answer to getting into that new car. Also, for those who have bad credit, there is bad credit car finance that can ultimately be used to build some good credit history.

About the Author

You get behind on car payments sometimes, but everyone deserves a second chance car finance because without your car things could get ugly. We help people with late auto payments, bankruptcies, car repossessions, and bad credit to keep their car or get a new or used car. For more information, visit http://www.secondchancecarfinance.com/

October 21st, 2011 | Tags:

Here are some tips to look into when you are choosing a Currency brokers. There are many Foreign exchange companies these days. It is hard to open a newspaper or browse the Internet without seeing some advert for currency trading. Most companies will say that their dealings will not cost money.

With the many offers in the market most people who are new to this industry would get confused. The right choice is them often wondered by many.

See to it that your broker is highly reputable. Brokers that got their license from the US and UK which is stricter is better to employ. See to it that the firm will also have more capital then what is required.

Often companies will try to give their clients the tightest spread they can. In terms of the broker you are getting into business with, make sure you know what his rates really all. Brokers that you can trust will be honest to tell you their cost.

When the market shows high vulnerability, the companies can widen your tight spreads. This is supposed to be offered to you at mid price but what companies do is charge you for the second spread.

The international market will be accessible to you depending on the platform that your broker has. With being an active trader, you will have to devote time into it and get used to the pace it takes. There are many available platforms on the internet that are downloadable. However, it is also vital that you should be able to access your dealing account from any machine you happen to be using.

Web based platform are the easiest to access. Traders will appreciate market information become available to them at all times. You will normally receive price charting facilities, as well as a calendar of crucial news events that will affect the markets, and news feed from your brokers. The main goal when getting a demonstration platform from your broker is that you will be able to practice trading. For the simulated platform this will give you a feel about how the market really is so if you do not like it they do not open an account.

Even if you have already been in the game for quite some time you will always want your firm to be the best. You can always find assistance with the people who work in the brokerage. For beginners, your broker should be happy to provide you with some basic training. You will get a lesson on what the procedures are and the broker will answer your questions. For those who are more active the discussion will be all about strategy and trading techniques.

About the Author

To read other foreign exchange articles make sure to visit international money transfer .Thank you for reading about forex transfer and foreign exchange.

October 20th, 2011 | Tags:

Health Saving Accounts (HSAs) are very popular trend these days, it is because of the huge benefits and use that go along with maintaining them. To understand clearly the appeal of HSAs, you need to know exactly what they do for you and how they are a win-win proposition in so many ways. They can also make your life good as its best.

The Good Benefits of HSAs

An HSA is used in combination with a high deductible insurance plan. In line to this the company deducts an agreed amount from your salary or earnings and puts it in an HSA; this amount is tax deductible up to a very good limit. Therefore, the funds in an HSA are then used to cover any medical expenses not covered by your high deductible health coverage.

Because insurance premiums on high deductible plans are much lower, many opt to make use of the money saved into HSAs, Another great thing about HSAs is they are attached to an individual or person, not the company, and any unused money is rolled over, and earns interest. It is because they are held by individuals, they don’t expire upon retirement of every individual.

HSAs as Investments

HSAs are saving accounts, so therefore if you have money in an HSA, you can actually use it for things other than medical expenses but in other expenses. However, should you choose to do so, you will have to pay taxes on the money spent and the money you earn.

If you have an HSA and an IRA, you can fund your HSA from your IRA once you wish for it. Make sure you have a low premium health plan to so that you can maximize the full benefits of your HSA, and always try to put in the maximum tax deductible amount. At the very least make sure you make regular deposits into your HSA.

About the Author

Lindel Garvint wrote this article for Ratelines.com. Ratelines has been a valuable source of financial information for nearly 6 years. For great editorials and the best information on the latest cd rates visit Ratelines.

October 20th, 2011 | Tags:

Use the internet to transfer money is quick and easy, but make sure to use a reputable company. Using the right online company will ensure that those transferring the money and receiving the money can trust everything will be done according to what they expect.

The right company will take care of everything and make sure all vital information is secure. Even if the person is transferring money online overseas if they use a good company they won’t have to worry about it because the online site is secure. Often there are sites that allow this service for free giving those involved freedom to send money whenever they need. Using a service ensures the transaction is done accurately to help reduce the risk of any headaches. This can even be done if it is using the internet to transfer money overseas.

Many are nervous about transferring money anyway, but become more cautious if it is using the internet and then second guess it even more if it is being done overseas. The fear is the money will be lost such as going to the wrong location, using a company that takes the money and runs or personal information, such as credit card number or bank account, are stolen. That makes it vital to use a reputable company. Investigate several different money transferring companies and check their history for at least a few years.

When using the internet to transfer money online it might be sent to a particular account or be put directly on a card. These two options are designated by the recipient as they have access to them. Using these options will allow money to go directly to the recipient. There could be an option of sending the money to an area money transfer service office as well. They recipient will then put up a check to put into an account at their convenience. Using this option adds a step before the recipient can get the money because they will have to cash the check or put it in an account themselves.

When a company has been chosen they will walk their clients through the process. They will provide options and instructions to help the client choose the best process for their needs. It is coming popular to send money using the internet because it is easier and quicker than sending a check. Furthermore, once a relationship is started and the process is smooth chances are if this service is needed again the sender and even the recipient will use that company again.

No matter what service is used or what money transferring method it is always a good idea to have the recipient contact the sender once they receive the money. This will help verify everything has worked according to plan. An alert for the transferring company is good, but hearing from the recipient is even better. It will also allow the sender to start investigating the issues quickly if there is a problem. Time is of the essence to ensure catching any dishonest individuals.

About the Author

Learn about money transfers around the world and what options are available based on country and fees. For more information on send money Overseas Visit home page http://www.sendmoney101.com/

October 19th, 2011 | Tags:

There is a variety of debt relief options and debt consolidation is among the common solution. In the process of consolidating the amount you owed, you have options to do it with or without a loan. Both come with advantages and disadvantages. It depends on your financial situation on which one benefits you the most. Most often, people will consolidate their multiple balances owed to different creditors into a consolidation loan. The question is: When should you go for a debt consolidation loan?

Here are the 4 common situations when people consolidate their debt with a consolidation loan:

1. You have difficulty managing multiple bill payments

Delay or miss payments will cause you to pay extra on the financial penalties. It is also an unhealthy bill payment management that may lead to a debt problem. If you find difficulties to make the monthly bills payment on time, you may need a better solution to manage them. Among the common solution is by consolidating them with a consolidation loan. Basically, you are applying a new loan with the amount that is sufficient to clear off the total bills, and then you focus on one loan repayment. By eliminating multiple bills with different due date to single loan repayment, you will be able to manage it better and avoid the potential of late or miss payments.

2. You find current bill payments cause financial burden

If bill payments are causing financial burden and you have to borrow money to make the monthly payments, you are at risk of facing a debt problem. Consolidating the bill payments into a low interest-rate loan with longer repayment period can be a good solution to relax your current financial situation and get rid of the financial burden immediately. You can choose a consolidation loan with longer repayment period to reduce the monthly payment to fall within your financial capability. Although in a long run, you may need to pay more if you consolidate the bills into a loan that takes longer repayment period, but it is an immediate option to get rid of your financial burden and avoid any potential risk of getting into a debt problem.

3. You like to ease your bills with one easy monthly payment

You can still consolidate multiple bills even though you are not facing any financial problem. One of the key benefits of debt consolidation is to ease the bill management. If you have multiple bills, you can always take advantage to combine all bill payments into a consolidation loan.

4. You wish to save money

If you have good credit score, you stand a good chance to get the best loan with the lowest interest rate. Therefore, consolidating multiple bills into a consolidation loan is a way to save money by reducing the total interest that is needed to pay toward the amount you owed.

Summary

The above are 4 common situations for people to go for a debt consolidation loan. If your finance intention falls in one of the 4 common situations, then you should goal for a debt consolidation loan.

About the Author

Visit Cornie Herring’s website at http://www.studykiosk.com/CreditBasics to find more debt relief resources on the option available for you to get rid of debt. Learn how various debt relief options work to help you get a debt free and explore the best option that best fits your financial situation.