Cash Out 401k To Pay Bills Or Pay Off Debt

If you were to ask me if I would cash out my 401K to pay bills or pay off debt, I would not, unless it is my absolute very last resort. There are many ways you can pay off your debt and bills before touching your 401K or your other retirement funds. When you are faced with bills and debts that are piled higher than your eyes, your vision and judgement can be heavily impaired, as if you are driving behind a SUV. The very first thing you should do is really look at your overall financial picture, determine your viable sources of money and decide if you should cash out your 401k to pay bills and your debt.

First step in determining whether you should cash out your 401k is to look at your overall finance. Is the financial trouble you are suffering a temporary thing. For example, are you not able to pay your bills because you lost your job? Events that cause you to lose your primary income may be temporary or permanent. In the case of you losing your job, you have to evaluate and really ask yourself how confident you are in finding another job. If you think it may take you a while before finding work again, or another viable source of income to pay your bills, then look at your assets. Start listing on a piece of paper what assets you have, what kind of assets they are (savings account, cash deposits, stock brokerage account, your home, and or other properties you may have), if these assets are interest bearing (for example, if your savings account is earning any interest), how much interest they are earning, and how liquid is it for you to obtain cash from your assets.

Start going through your list of assets and personal properties and figure out the best source of money to cash out. You will want to compare interest rates - the interest rate of your debt or bills that is being incured, and the interest rate of your money that you are cashing out or borrowing to pay off your debt or bills. In other words, if you are borrowing money from one source to pay off your debt, you will want to find a source of borrowed money that is of lower interest rate charge than the interest rate charge of the debt that your paying off. In addition, if you have some money sitting in a CD or savings account that is earning your a 4% interest rate, and you have credit card debt that is incurring a 16% APR, it would really make sense if you use that money that is earning only 4% interest rate to pay off an account that is charging your 16% interest rate. Your 401k can yield a return that is much higher than a bank savings account or a cash deposit account, if property invested. Therefore, you should think twice about using your 401k money to pay off your debt (aside from possible penalty and interest for cashing out your 401k).

Let’s assume that you do not have money available to pay off your bills or debt, what can you do? If you own a home and you have equity (meaning that the market value of your home is higher than the outstanding mortgage balance on the home) in the property, you really should look into getting a cash-out refinance and use the equity of your home to pay off the debt. A cash out refinance is simply the refinancing of your mortgage by obtaining a new loan of higher amount to pay off your existing loan. The amount leftover after paying off your old mortgage is cash in your pocket that you can use. It is quite possible that your monthly payment on your loan will be higher because of a higher loan balance (and also a higher interest rate). But the great news is that the IRS will give you mortgage interest deduction. Therefore, you have essentially turned your credit card debt into a mortgage debt; from an interest charge you can not deduct on your tax return, to interest charge that you can deduct; from bad debt to good debt.

Now, let’s assume that you do not have money in your bank account, you do not own a home, and you absolutly do have have any other source of money that you can borrow to pay your bills or to pay off your debt, but a 401k. Then what do you do? Well, desperate times call for desperate measures. If your 401k is truely your last source of money, you will need to consult with your 401k administrator or your employer to see what rules and regulations they have on “borrowing” or “cashing out” on your 401k money. There is a difference between borrowing and cashing out. Most 401k plans will allow you to borrow from your 401k account for use of purchase of your first home, pay your medical bills, pay for education related expenses and other exceptional circumstances (again, consult with your 401k administrator). However, if you were to get money from your 401k for reasons other than those allowed by your administrator or the IRS, it becomes a cash out of your 401k. In the event of you cashing out on a 401k before you have reached 59 1/2 of age, the IRS will consider it an early distribution of your 401k and you may incur a 10% tax penalty (you can visit IRS publication http://www.irs.gov/retirement/sponsor/article/0,,id=151926,00.html for details on the penalty).

Hopefully I have given you enough information and alternatives for deterring you from cashing out your 401k as a source of money to pay off your bills or debt. Everybody’s situation will be different and it will be to your benefit to consult with your 401k plan provider or administrator to see the consequences as a result of you cashing out on your 401k.

Network Your Way To Your New Job - Using Three Easy Techniques

Networking is the new buzz word – it’s everywhere these days. It used to be known by catch phrases like, “It’s not what you know – but who you know” or being part of “The Good Ol’ Boys Club”. Business-focused networking today can really be a powerful career management tool but it takes time and effort to make it effective. Amazingly, it is estimated that than 70% of jobs are being found through word of mouth – networking is vital! There are many forms of networking some are very informal and others are strategically developed for optimal outcomes. Described below are three main strategies to launch your networking plan.
CONTACTING ALL THOSE YOU KNOW - The probably most obvious form of networking is done by going through your entire address book and business card collection. Setting up an organized routine of systematically working through your list; communicating with friends, family, coworkers, colleagues, and acquaintances keeps you on track. Make sure to also include association members, church friends, people you volunteer with, and your children’s friends’ parents, coaches, and teachers on your contact list. Stay aware for opportune moments to mention you are looking for work, start with those in similar industry or field so they can keep their ears open and maybe make a few calls to others who can make a few calls to others – and so on – and so on - and so on…
Be honest with those who you don’t usually socialize with and let them know you’re interested in talking with them about your search for the perfect job. Invite them out for coffee or lunch, email if it is more convenient for them and explain what you are looking for and what you have to offer. This is when an Online Resume comes in handy. You can give them your card and write the address of your resume on the back of the card so they can easily pass along the site to other interested parties who can immediately see your qualifications and have your contact information waiting.
REFERRALS - My personal favorite networking clients come from referrals. Working in a service oriented profession; every referral to me, feels like a compliment or award. It means someone liked my work enough to tell others about it and positively pass my name on when someone is looking for assistance writing a resume or preparing for their job search. Referrals like all networking, work in a pyramid fashion, it just keeps expanding and reaching further to more potential clients. The happier my clients are the more they will pass my name to others looking for help and I make sure to keep that in mind with every client or potential client I speak with.
In terms of looking for a job, referrals can be the strongest and fastest way to an interview. The referring contacts can do the selling of your qualifications for you and the employer will assume you can provide a high quality of work because the referral is coming from a reliable source. So, talk with your contacts and let them know you would appreciate them passing on your name to others. Keeping in touch with contacts using a newsletter, emails, phone calls or personal note keeps your name and service in their thoughts.
ONLINE NETWORKING – The newest form of networking is done by utilizing websites specifically designed to promote networking such as www.LinkedIn.com, www.Ryze.com or www.Xing.com. These are a great way of getting in touch with professionals you are interested in working with or for. There are smaller networks for individual industries such as www.nursegroups.com or www.teachersnetwork.org. With sites like www.LinkedIn.com and www.CraigsList.com you can even post your resume for employers to view. More social networking sites are gaining professional use such as www.MySpace.com and www.ClassMates.com. All these sites are free, easy to use and worth your time to cut and paste your resume or parts of it for viewers to see.
Remember that networking is an ongoing process, one that should be worked on daily. You will need to build a rapport with your contacts you are asking for help from and make sure you reciprocate assistance when you can. Keep records or some type of spreadsheet to monitor contact visits, effectives and responsiveness, and any notes or tips gained from these contacts. Navigating through these networking tips will definitely expedite your job search.
About the author.
Kris Plantrich is the owner of ResumeWonders Writing and Career Coaching Services. Certified in Resume Writing and Interview Coaching. Experienced and affordable writing all levels and most industries and is nationally published. The original copy of this article can be seen by visiting www.resumewonders/blogspot.com or by visiting http://www.resumewonders.com. Reuse of this article is encouraged but must include a link to http://www.resumewonders.com.

Deck Benches: The Lastest Trends

For homeowners with decks, deck benches can offer some of the most functional and attractive seating available – especially if their deck has limited space available. Deck benches can offer an abundance of seating without having to clutter the deck with individual outdoor chairs.

There are two main categories for benches – those that are attached to the deck and those that are not. For a while, attached deck benches were very popular; however, they did not offer the most versatile seating so unattached deck benches soon started gaining in popularity. Because unattached deck benches can be situated into different seating arrangements, they are usually very well-suited for entertaining guests and creating comfortable gathering areas.

When shopping for deck benches, you will see that you have a variety of options to choose from. Whether your deck would be best enhanced by an intricately-detailed teak deck bench or a simple cedar bench, there are deck benches available to suit every need.

In addition to offering attractive seating, deck benches can also serve other purposes. If you have children who play on the deck and your deck always seems to be cluttered with toys, you may want to consider deck benches that double as storage benches, allowing you to keep toys out of sight when you are entertaining guests.

The color of a deck bench is very important. Some people prefer deck benches that match the color of their deck while others prefer a contrast in color. When shopping for your deck benches, always consider how the color of the bench will look when it’s sitting on your deck.

The prices for deck benches vary and how much you spend will be determined on the style of the bench you want and what type of material you would like the bench to be crafted from. The most basic of deck benches can cost less than a hundred dollars, but if you are concerned with getting a quality deck bench that will look great after years of use, the cheapest bench probably isn’t the best route to go. Well-made deck benches usually start at about three-hundred dollars and go up from there.

About the author

jesse Akre, owner of numerous furniture websites, makes it easy to find stylish Deck Benches and decorative indoor benches . Learn how to decorate your patio and home in style by clicking the following link: http://www.SimplyBenches.com.