Posts Tagged ‘401k plan’

Do I Still Need a 401k?

Posted February 13, 2011 by Bernz

After hearing about the severe financial hit many people have taken with the recent financial turn, and with stories of people losing all their investment in their 401k many people wonder if a 401k is still a sound financial instrument.  From the start let’s point out what a 401k is, an investment strategy designed to help you supplement your income during retirement.  A 401k is not guaranteed, just as stocks are not guaranteed, but this in and of itself does not mean that a 401k is really a risky place to invest your money.

The presumed tax benefits of a 401k are one of the major reasons why people continue to invest at least part of their money in a qualified retirement account.  The amount that you divert into the 401k is not taxed, and over the course of the 30 years or so that a 401k is designed to hold your money you can accrue a relatively large savings on your income tax.

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Posted in 401k, Investing Strategies, Retirement Planning | No Comments »

Borrowing from your 401k Plan – Is it always the wrong thing to do?

Posted April 7, 2009 by Bernz

When times are tight, sometimes we need to dip into our savings to make ends meet. If the money you are bringing in from your paycheck is not enough to pay your bills or the interest you pay on credit cards or other debts gets too high you will have to get the money from somewhere. Or even personal reasons such as health and family issues.

borrow401k

Over the last few years, many people have used all of the equity in their homes by taking out home equity loans and now because of falling home prices they often owe more than their homes are worth. This has led consumers to look for other sources of cash to pay their growing debt and one of these sources is borrowing from their 401(k) plan.

I remember about 9 years ago when I had to borrow money from my 401K plan and use that money for down payment of a home. The original term of the loan was 15 years though I was able to repay that loan in a little less than 5 years time. It really was not a bad decision after all as my home have already doubled in value since. It was a decision that I had to make at that time for family reason.

More information on 401K plan and why you do not have to do what I’ve done………….. (more…)

Posted in 401k, IRA, Retirement Planning | 1 Comment »


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