In the recent economy, many people have been forced to change jobs or even move into entirely different careers. Or maybe you were fortunate enough to change jobs because you were seeking a promotion or because you decided to follow your dream and find a job doing what you love. No matter the reason, many people end up forgetting about their 401(k).<\/p>\n
This could be a critical error. An account or two left behind at your last employer is no way to manage your money. Why not take control of your financial future and consolidate your nest egg?<\/p>\n
Here are some reasons to strongly consider rolling over that money to an IRA.<\/p>\n
For one thing when your money is in a 401(k) the only investments you have to choose from are the ones they offer you and often those choices are severely limited. If you consolidate your old 401(k)’s and roll them over into an IRA the entire investment universe is at your fingertips because there is practically no limit to what you can use as an investment in your IRA.<\/p>\n
Another reason you may want to move is lack of service. Have you ever tried to ask your 401(k) custodian for investment advice? Many times you will get an unlicensed clerk on the phone that can’t legally offer you any help at all. And God forbid you ask a tax question; they read you a 3 page disclaimer telling you that you need to consult with your CPA. Might it make more sense to move your IRA to an advisor you trust and who you know will return your phone calls and offer his\/her help whenever you need it?<\/p>\n
Something else to seriously consider is that many 401(k) plans are laden with excessive and sometimes hidden fees that could be constantly chipping away at your returns. If you roll that money over into an IRA there are many options that offer low fee’s or even no fee’s taken out of your money.<\/p>\n
Finally, The SECURE Act ended the lifetime stretch for non-spouse heirs. Now, your beneficiaries must drain the account within 10 years. If the money stays in a 401k, the plan usually controls how fast they take it, which can force big withdrawals and bigger tax bills. Moving those funds to an IRA gives your family more flexibility. They can choose how much to take each year within the 10-year rule, plan around their income, and avoid getting pushed into a higher tax bracket.<\/p>\n
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If you\u2019d like help choosing the right IRA, call my office. We\u2019ve helped families move millions from 401k plans into IRAs the right way. Give us a call today to schedule a 15 min conversation that can save you thousands!<\/p>\n
3 Insurance Policies You\u2019re Probably Better Off Without<\/p>\n
Fear of the future sells insurance. Because we can’t predict the future, we want to be ready to cover our financial needs if, or when, something bad happens. Insurance companies understand this fear and offer a variety of insurance policies designed to protect us from a host of calamities that range from disability to disease and everything in between. While none of us wants anything bad to happen, many of the potential catastrophes that happen in our lives are not worth insuring against. In this article, we’ll take you through 3 policies that you’re probably better off without.<\/p>\n
1. Private Mortgage Insurance
\nThe infamous private mortgage insurance (PMI) is well known to homeowners because it increases the amount of their monthly mortgage payments. PMI is an insurance policy that protects the lender against loss when lending to a higher-risk borrower. The borrower pays for this insurance but derives no benefit. Fortunately, there are several ways to avoid paying for this unnecessary policy. PMI is required if you purchase a home with a down payment of less than 20% of the home’s value. The small down payment is viewed as putting you at risk of defaulting on the loan. Put down at least 20% and the PMI requirement goes away. Alternatively, you can put down 10% and take out two loans, one for 80% of the sale price of the property and one for 10%, although interests rates can prevent the economics of this maneuver from working out in the homeowner’s favor.<\/p>\n
2. Extended Warranties
\nExtended warranties are available on a host of appliances and electronics. From a consumer’s perspective, they are rarely used, particularly on small items such as DVD players and radios. If you purchase a reputable, brand-name product, you can be fairly certain it will work as advertised and that the extended warranty is statistically likely to be unnecessary. If you spend $5,000 on a giant, flat-screen television, the policy is still unlikely to pay off, but might make you feel better. For everything else, forget it.<\/p>\n
3. Automobile Collision
\nCollision insurance is designed to cover the cost of repairs to your vehicle if you are involved in an accident. If you have a loan out on the car, the loan issuer is likely to require that you have collision insurance. If your car is paid off, collision is optional; therefore, if you have enough money in the bank to cover the cost of a new car, collision insurance may be an unnecessary expense. This is particularly true if you are driving an old car, because cars depreciate so quickly that many vehicles are worth only a fraction of their purchase price by the time the loan is paid in full.<\/p>\n
When Choosing Insurance
\nThere are so many policies to chose from, and they all cost money. While a certain amount of insurance coverage is necessary and prudent, you need to choose carefully. In general, broad policies that offer coverage for a multitude of potential events are a better choice than limited-scope policies that focus on specific diseases or potential incidents. For more information or to get an insurance review contact my office today!<\/p>\n
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