The piece Laid Off, With Retirement in Sight by personal finance reporter Tara Siegel Bernard, lays out some very good approaches about how to deal with the set backs of lost revenue from a position and what you can do to offset the loss an still plan ahead with retirement. Not all or possibly any may work for your given situation so please consult a financial adviser before making any decisions.
One of the major points to take away from the article is that it is easier to earn additional money via part-time work, or even a reduced salary than it is to try to save additional money. A real concern becomes when people come up short for retirement or any financial goal for that matter they begin to increase their risk and assume higher rates of return which are just not achievable which leads to an even bigger shortfall to your goal.
Here are the take aways from the article; (see my comments in blue)
- REASSESS CAREER POSSIBILITIES
- SOCIAL SECURITY
- TAPPING RETIREMENT SAVINGS
- DO NOT ROLL OVER YOUR 401(K), I only agree with this point if you absolutely need access to your assets before you reach age 59 1/2. In an IRA you will be penalized for early withdrawals prior to this age. However if you don't need the assets then an IRA would like give you additional investment options and greater flexibility.
- TAP YOUR ROTH I.R.A, again there are only a few specific occurrences which will allow you to withdraw assets without penalty so be sure to check the rules for your specific situation
- PAY FOR HEALTH INSURANCE
- ANNUITIZE YOUR I.R.A. OR 401(K), the basis for this move involves receiving a tax break so be sure to consult your financial adviser or accountant to ensure that a decision like this would indeed help your tax situation
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