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What's PlayingBazaarsNov. 21
St. Stanislaus School benefit, 9 to 4 in Kolbe Hall, Adams. Bake sale, snack bar, games, Chinese auctions, money raffle, crafts, and pierogi.
Blackinton Union Church, 1373 Massachusetts Ave., North Adams; 10 to 2. Crafts table, bake sale, Chinese auction, the Christmas table, and kid's grab bag. Lunch $4, $2 kids.
First Congregational Church, North Adams, 9-2.
Nov. 28
Becket Federated Church, Route 8, holiday bazaar from 9-3. Lunch, crafts, baked goods, holiday and other items. Information: Mary Peltier, Parish House, 413-623-5217.
Dec. 5
Holiday Fair at First Congregational Church, 25 Park Place, Lee, from 10 to 3; handcrafted items, raffles, children's shop, bake sale, cut Christmas trees and lunch from 11 to 1. Includes angel-themed goods from SERRV. Information, 413-243-1033 or www.ucc-lee.org.
Dec. 12-13
North Adams Country Club, crafts 9-4; food from That's a Wrap from 11-2. Information: Sheryl Morehouse at 413-822-3329.
Planning a bazaar this season? Submit information to info@iberkshires.com to have it listed here. |
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The government's issued controversial new guidelines stating that women shouldn't get annual mammograms until age 50, rather than age 40.
iBerkshires will be meeting with local medical experts Monday. Have a question you'd like answered on this issue? Send it info@iberkshires.com with "mammogram" in the subject line. |
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Independent Investor: Rolling Over Your 401(k) — Or NotBy Bill Schmick
iBerkshires Columnist
10:30AM / Friday, June 05, 2009
 | | Bill Schmick |
So you've just been laid off or down-sized or fired, regardless of the term used, you are now looking for another job in an environment that is less then ideal.
The phone rings and a hard-charging financial adviser gives you his sales pitch on why you should roll over your 401(k) tax-deferred employment plan at your former employer into an IRA right now. Before you agree consider your options.
The first thing to consider is whether you have been happy with the performance of your now ex-employer's handling of your retirement account. Aside from matching your contributions at some level (usually 3 to 5 percent) of your yearly contributions, have you been happy with the way your money has been invested? For many employees the answer has been a resounding "no" since last year many 401(k) plans have lost anywhere from 20 to 50 percent of their investment value.
But as long as your balance is greater than $5,000 you still might want to leave your money there until you find a new job for the following reasons:
If you are 55 years old but less than 59 1/2 and you are out of a job for a protracted length of time you may need to tap your 401(k) savings to support yourself. Depending on your retirement plan, you may be able to withdraw money without paying a penalty. You may also "loan" yourself some money from you 401(k) plan as well. Once you roll that money over into an IRA you may not have that freedom. In addition, assuming you get a new job and your new employer offers a 401(k) plan (most do) you can then roll your old plan into your new one tax-free.
Of course, there are benefits to rolling your money over into an IRA. In this environment, anything can happen to a company so leaving behind your 401(K) out of neglect or laziness is not too smart. I did that several years ago only to discover that while my 401(K) sat in cash I missed a four-year bull market in stocks. Normally, there are far more investment selections in an IRA while most 401(K) plans are restricted to a fairly limited menu of investment choices.
So how does one rollover a 401(K) plan? First we must understand the difference between a transfer and a rollover. When you transfer your 401(K) you never take physical custody of your funds as they move between your old 401(K) plan and your new IRA account. You can open such an account at a broker, money manager, bank or a mutual fund IRA. This is the preferred process.
With a rollover, your old company sends you a check after liquidating your investments in the plan. You then have the responsibility of depositing this amount into a rollover IRA account within a certain amount of time (usually 60 days). If you are under 59 1/2 and do not get this accomplished, you will be subject to a 10 percent penalty tax so make sure you have your rollover account set up beforehand.
In addition, when the company makes the check out to you it is required to withhold 20 percent of your money for taxes. Even though you deposit the full amount before the 60-day time period is up you won't get the withheld money back until you file your taxes in the following year. That means you have to come up with the additional 20 percent of your money within that 60 days in order to roll over the full amount. Unless you have a very good reason, I advise readers not to take this route.
Normally, you can transfer any investments you already have in your 401(K) to an IRA. However, sometimes if you also own company stock in your plan there may be added capital gain or income tax consequences so it is best to consult an accountant in those circumstances before transferring company stock.
Whatever you decide, don't make the mistake of cashing out your 401(K) when you leave your job. Unfortunately, about 45 percent of laid-off workers and 66 percent of workers under 30 who have lost their jobs take their money and run. Not only do you pay a 10 percent penalty for doing that (if you are under 59 1/2 years old) but you also pay income tax on the money as well. But the worst consequence is invisible and unrealized. That cash could have continued to earn, compound and earn more money again and again for years into the future at a tax-free rate.
Losing your job is bad enough, don't compound it by throwing away your future retirement as well.
Bill Schmick is a licensed investment adviser representative as well as a registered financial consultant. All views and opinions expressed by Bill in his columns are strictly his own. Direct your inquiries to him at 1-518-610-1553 or wschmick@fairpoint.net. You can also visit www.afewdollarsmore.com for more of Bill's insight. |
| Yep, the good ole Wall Street Journal, one of several papers I read each day. I need to support the newspaper industry whenever I can. | | from: Bill Schmick | on: 06-07-2009 |
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| is that a real newspaper you are holding? | | from: newspaper | on: 06-05-2009 |
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