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Category Archives: IRA

Most of us have been there at some point. We’ve contemplated taking a portion of money from our IRA or 401k. Whether it’s to help pay the bills during tough times, or to help fund a much needed vacation, it can be tempting because an actual retirement date is so far away. Surely there’s plenty of time to build the account back up, right?

Borrowing from your IRA or 401k can be more costly than you think, and can have long-lasting effects on your retirement account value. If you knew ahead of time that borrowing that small amount of money now, could mean having to retire three to five years later, would you be as willing to make a withdrawal?

One very important consideration that may not come to mind, is the money withdrawn from the retirement account will no longer be invested. So there’s no chance of the money growing and working for you. Depending on market fluctuation and the investments, you could be missing out on growth or dividend income. Add to that possible penalties, fees and taxes for a withdrawal and it’s pretty clear that withdrawing from any retirement account is a decision not to be taken lightly.

Borrowing from an employer 401k is a better choice than taking from your IRA. Some companies make it easy and offer short-term loan options. Then, the loan is paid back via payroll deductions. What employees usually don’t scrutinize before signing the loan paperwork, are the fees and terms of the loan. Some employers charge fees or require that employees pay back the entire loan within 30 or 60 days. Plus, if the employee decides to leave the company before the loan is paid back, there could be  tax consequences and a 10% penalty.

The IRS allows you to borrow from your IRA once per year without penalties, if the money is paid back into the account within 60 days. However, if you miss the 60-day deadline or if you don’t plan to pay it back, you’re subject to federal income taxes, a 10% penalty and possibly state income taxes as well for those under age 59 1/2.

If you’re purchasing your first home, needing money for medical expenses or higher education, there are exceptions when borrowing from your IRA and more flexibility in these cases. Borrowing money to pay for items that depreciate, such as a car, is never a good option. Borrowing from your IRA or 401k should be a last resort and only in times of extreme need. The bottom line is, there’s no way to calculate just how significant the impact of a withdrawal could be on the final value at retirement.

Retirement is that one day in the future we all look forward to, when we’re work free, carefree and living life to its fullest. Retirement at age 65 is no longer the goal or even an option for most Americans. While it was once a target age, more Americans are needing to work past ageContinue Reading

Salaries are not easily moving upward these days, and in many cases people are making much less. It’s fairly tough to set aside a chunk of your check for retirement when your monthly income barely covers necessary expenses. There are a few things you can do to prepare and plan for retirement even if youContinue Reading

A Roth IRA (Individual Retirement Account) is a type of retirement account that offers tax-free income in retirement. A Roth IRA is unlike a Traditional IRA, in that there is not an up-front tax deduction. Roth IRA’s are ideal savings vehicles that can be held in addition to a Traditional IRA, especially if you expectContinue Reading

Over the past decade, the price of gold has consistently gone up. According to many experts in the field of investing, and specialists on the subject of precious metals, gold makes a great hedge to protect the investor’s assets against political turmoil, inflation, and other unpredictable future events. Diversifying by creating a Gold IRA isContinue Reading

What is a fiat currency? It’s money that derives its value from government regulation and not backed by a tangible asset such as gold or silver. Virtually all “paper money” today is a fiat currency and as such is a liability of a central reserve bank. In the United States, currency is known as ‘FederalContinue Reading

A gold IRA is any Individual Retirement Account that includes gold in its portfolio. Investing in gold is always a good idea, say the experts, and gold should always be included in any well-balanced retirement portfolio. They maintain that adding precious metals, especially gold, to your IRA investment portfolio will produce three positive results: 1.Continue Reading

What, Exactly, is a Gold IRA Rollover? This type of investment applies to a gold IRA account that has been established by rolling over retirement investment funds. The money invested, to put it simply, goes into gold, which then becomes part of the assets that make up your gold IRA portfolio. Nearly all investment counselorsContinue Reading

“Even accountants,” says The Wall Street Journal’s ‘Smart Money,’ “can’t keep track of the rules for IRA contributions.” The U.S. government, via the Internal Revenue Service, has come up with many regulations to control investments in Gold IRAs. It’s up to each individual investor to make sure these regulations are followed, especially if their GoldContinue Reading

“Life is nothing without a little chaos to make it interesting.” -Amelia Atwater-Rhodes, Demon in My View It is a given that the volatility and uncertainty of today’s global economy border on chaos. Within this financial maelstrom, however, lies a precious, glowing ember: gold. As the value of the dollar and stock assets become moreContinue Reading