You may be able to take out a loan from your 401(k). But should you?
If you need the money, and have no other alternatives, you might want to consider a 401(k) loan. It’s your money, and you’ll pay yourself back, with interest.
But 401(k) loans also carry some big drawbacks. First, a loan will reduce your account balance. In addition, if you fail to make payments according to the terms, you may create a taxable distribution that also may be subject to a 10% penalty. And if you have to leave your job, you’re generally required to repay the loan within 60 days.
To avoid being forced to take a 401(k) loan, try to build an emergency fund containing six to twelve months’ worth of living expenses. Keep the money in a liquid account.
Do whatever you can to keep your 401(k) intact and working to help you achieve the retirement lifestyle you’ve envisioned.
Financial Moves for a Growing Family
When you add a child to your family, it’s an exciting time in your life and a busy time too. Still, you’ll want to think about making some key financial arrangements to accommodate your new child’s presence.
Here are some suggestions to consider:
First, apply for a Social Security number for your new child.
Next, review all your insurance health, disability and life to make sure your new child is properly covered.
Also, look to the future by starting to save for college. You may want to consider a tax-advantaged college savings vehicle, such as a 529 plan.
Finally, update the beneficiary designations on your IRA, 401(k), life insurance and other accounts. And consult with your legal advisor about any other arrangements that might make sense for your situation. The future is not ours to see, so it pays to be prepared.
Few things awaken the holiday spirit like partaking in a cherished tradition. Traditions come in many shapes and sizes and from a variety of origins. Many are deeply rooted in cultural and religious beliefs while others evolve through habit. Either way, it’s the traditions we follow that prepare us both mentally and spiritually for the holiday season. From our family to yours, we would like to share some treasured family traditions to help foster the holiday spirit.