Watch Out For The 401k 60 Day Rule
With several options to transfer funds out of your existing 401k retirement account, it is difficult to know what you should do. Often the stress from the change that has necessitated the 401k transfer is enough for sleepless nights. When you couple in the decision to transfer your hard-earned retirement funds into a new account, the situation can be quite overwhelming.
Though the decision of where to transfer your funds in not simple to make, it is critical that explore your various options available to you. The first thing that you will want to do is consult with your tax advisor and/or financial planner.
Not only can a good financial planner steer you in the direction of which type of retirement account to transfer into (401k, Traditional IRA, Roth IRA, etc...), but they are also updated on the current tax laws regarding transfers.
The Internal Revenue service had complicated the rules for 401k rollovers, making the transfer rather daunting for the average investor. One of the more burdensome rules they have implemented is called the 60 day rule.
The 60 day transfer rule was designed to limit the amount of time that you have available to transfer the funds from one account to the other. The Revenue Service wants you to take care of the transaction and not leave the funds out in neverland. The primary reason is that they want you to decide how the tax treatment should be for the transfer.
Despite the simplicity of this rule, the tax implications of it are very present. The best way to avoid this penalty is to determine where the funds are going well before ever transferring them in the first place. A good advisor will help you get your ducks in a row before making the transfer. This allows you sufficient time to fill out everything that is required to move the funds.
You shouldn\'t make the assumption that the Internal Revenue Service will be forgiving with this rule. In fact, quite the opposite is true. Even cases involving only one or two days has incurred the penalty and been rejected appeals.
The only scenario in which the IRS may be somewhat lax on this rule is in the case of extreme circumstances or hardships. These circumstances are limited to cases such as death, incarceration, hospitalization, or disability. Though it is considered a compassion ruling to bypass the 60 day rule, the IRS does not provide a free pass to the taxpayer. Cases in which the compassion rule is applied will often see a fee for the waiver, dependent upon the size of the account transfer.
Roger Harrison is an experienced financial planning enthusiast that has extensively studied how to do a 401k ira rollover and the best ways to transfer your money. Visit him online at the The 401k Rollover Guru for more information on these and other related topics.
3 Steps To Saving More Money
Saving money is not easy and is made more difficult if you have a short-term outlook regarding your personal finances. If, like many people, you are living from one pay cheque to the next, it is difficult to put some money aside for a rainy day or for a summer holiday. But what if you were to change your financial outlook into a medium to long-term one? You might believe that you cannot afford to think ahead and make plans, but in most cases you would be wrong. Most people should be able to save some money and with some effort, maybe even as much as 20 percent of their salary each month.
Step 1 - Income Analysis
First of all it is important to have a handle on where your income is going. Unless, we are on an extremely tight budget or are very money conscious for other reasons, many of us have never really sat down and considered what our money is being spent on - we just know that by the end of the month, it has all gone! You will know if you are consistently spending your money on unnecessary purchases, for example. Having this knowledge equips you with the control to change things a little or a lot.
Step 2 - Saving Money Mentality
Many people have never been taught to save and as children, immediately spent the money they received without any forethought. You often hear people say, \"Life is short, if you want something buy it now\", but thankfully for most of us life is not really so short and along the way we will have to deal with both opportunities and challenges. Having some money saved will help you make the most of the opportunities and ride the challenges. Step 3 - Savings - Seeing the Big Picture
If you could save 20 percent of your salary each month, imagine what that would mean in real financial terms. For example, if you earn 2000 dollars per month and you saved 20 percent or 400 dollars out of every pay cheque, after 12 months you will have saved 4800 dollars! Regularly saving this amount of money would give you the financial freedom to take advantage of more of life\'s opportunities. You could plan the special holiday you have always wanted to go on, buy the car that you have been dreaming about for years, or help put a child through college. When it comes to life\'s challenges, having a lump sum put away could help you pay for private medical care or deal with an expensive plumbing problem in the home, all without having to turn to the bank for a loan and getting into debt.
Now Do Something Special or Pay Off That Debt! As we have already seen, knowing exactly where your money is going is the starting point. Next, start thinking about the big things you could achieve with some money in the bank. Some people compensate themselves for not having what they really want, by making many frequent small purchases and getting a temporary \"feel good\" sensation afterwards.
Rather than satisfying yourself with small purchases, such as new clothes and CDs every week or always buying the latest mobile phone, think about how much more satisfying it would be to save up and buy or do something special like going on holiday or important like paying off a debt. You can now do something which you previously thought was out of your reach, but is achievable with a little effort.
Emmanuel Mendonca is the webmaster of Living and Working in Greece at http://www.living-and-working-in-greece.com. Get the current best debt consolidation rate quotes
What You Need To Know About Investing in ASX Shares
Investing or trading in the share market can be a great way to increase your wealth, and if you play your cards right eventually supplement the income from your job. But there are a few fatal mistakes that may stop you from enjoying success on the ASX Share Market.
What do I mean? Let me give you an example: Let\'s say you started putting $150 a month into ASX Shares in 1980. That\'s around $5 a day. It earns an average of 15% per annum over the years including dividends. If you re-invested all your returns, today it would be worth over one million dollars - $1,038,490 to be exact.
But not everyone makes it that far. In fact statistics show that over 82% of traders lose a large portion of their capital and never trade again. If you are investing for the long term, your odds are slightly better (although 2008 scared a lot of investors out as well). But the thing is - now they miss out of the rest of those gains, on that million dollars that we discovered.
So how can we make sure we don\'t make the same mistake trading ASX shares? Your Trading Plan is the answer, and although it can be simple, it is the most powerful tool you will use in the market. If you haven\'t got one, you shouldn\'t be trading. But where do we start?
Well, one man\'s trading plan is another man\'s ruin. In other words, we are all different - and we all invest differently. But there are a few solid ground rules that will make your job easier. So having a trading plan should definitely involve the following:
1: Your Rules for Buying and Selling - these are the rules you have tested that determine when you buy and when you sell a share. Whether it is buying for fundamental reasons, like company earnings or book price, or whether it is for technical reasons like crossing a trend line or Dow theory it doesn\'t matter: so long as it suits you.
2: Your Money Management Rules - these are the rules for how much you will invest in a single position, and then in your total positions. This means you decide how much is right for you when putting money in a share. Obviously, if you put too much into one share on the ASX, you will lose all your money if it disappears. But also, if you put your money into too many shares it will be hard for you to outperform the market. Usually between 6 and 12 positions is optimum.
Having these in place will set you on your way to a solid start in ASX Shares.
Learn more about investing in ASX Shares with the free course at www.asxmarketwatch.com . Dave McLachlan also has free research on the Australian Stock Market.
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How to Invest in Penny Stocks
Investors consider any stock selling for less than $5 a penny, microcap or nano stock. For all practical purposes, these three designations are synonymous. A more inclusive description of a penny stock makes reference to a company\'s total worth of its outstanding common stock, also referred to as its market capitalization, instead of the price of its stock. In reality, there is no single term which fully characterizes a penny stock.
The market capitalization of a business, otherwise known as the market cap, is equal to the company\'s current stock price multiplied by the number of shares of stock outstanding. The performance of this simple exercise in mathematics will result in the total dollar value of all of a company\'s shares at a precise point in time. Penny stocks, unlike most stocks, trade in the over-the-counter (OTC) market as opposed to being listed on one of the stock exchanges. In the case of most stock transactions, an investor will employ an agent to act on his behalf to set up a transaction with a third party. This broker, as the agent is routinely called, will then earn a commission for expediting the transaction.
Brokers tend to charge most penny transactions as principle transactions. This way the broker is not earning money through commissions but rather on the spread through buying an selling at key moments. The prices at which penny stocks are both bought and sold will vary. The gap between the asking price and the bid that is made is what is known as the spread.
Penny stocks have a typical spread of between 25% and 33%, however they can get as high as between 50% and 100%, or higher. In addition, two bid and two ask prices are constantly present. These are known as the inside bids and asks, and the outside bids and asks. Remember that the outside bid and the outside ask are the aspects that generate the most action. Moreover, the prices of penny stocks can be marked up. This means that an agent has kept a penny stock aside, and, as a result, has assumed a portion of the risk that comes with the changes in market price.
The process of buying penny stocks can be somewhat complicated and problems can sometimes arise, millions are also sometimes at risk, however they can be helpful to new companies that are struggling for capital. Discuss possible investments with your broken, this way you can be sure you\'re making good decisions. Just be aware that some brokers dealing in penny stocks may only be interested in selling and not the getting you the best investment.
Want to find out more about Invest In Penny Stocks, then visit Jimmy Dawn\'s site on how to choose the best Microcap Millionaires for your needs.
4 Steps to Creating Good Credit
As a consumer you\'ve learned the importance of establishing a good credit rating with your lenders. Whether you are shopping for a new home or auto, or searching for the best deals on insurance, your credit worthiness will be judged by your credit rating or credit score.
A bad credit history or bad credit habits will place \"black marks\" on your credit profile. These include things such as late payments, having an account assigned to a collection agency, and of course bankruptcy.
Establishing good credit habits and therefore a good credit rating will improve your credit worthiness. This will be reflected in potential lenders offering you substantially lower interest rates and better deals on credit offers.
Here are 4 tips to help you create a shining credit profile:
1) Pay Your Bills On Time
Lenders only have your past payment history on which to decide the type of credit risk you present to them. How you pay off your debts now indicates to them how you will pay off future debts.
2) Don\'t Use Too Many or Too Few Credit Cards
How much is too much ? How little is too little ? Many credit experts and financial planners suggest two to four credit cards is just the right mix.
3) Pay At Least The Minimum Due
Always pay at least the minimum due payment, but never less. And remember, just paying the minimum payment means it will take you years and years to pay off that credit card.
Example: Paying off a $2,000 credit payment at 18% APR with a minimum monthly payment of 2% ($40 dollars or less) will take you 30 years to pay off the amount plus interest.
4) Review Your Credit Report Regularly
Monitor your credit report from all three major credit bureaus - Experian, TransUnion, and Equifax - on a regular basis. Check your credit profile at least annually. Review it carefully and make sure that any past mistakes or disputes have been corrected.
Also, if you notice an account listed that you know that you have not personally opened, contact that creditor and the credit bureaus immediately. This could be a sign that you\'ve had your identity stolen. Request to have a fraud alert placed on your profile and account to protect yourself and your credit. Identity theft is the fastest growing consumer crime in America, with an estimated 1 million people victimized each year.
Establish good credit habits early in life and reap the benefits that your good credit rating will provide you for the rest of your financial future.
Renting with bad credit can be easy or hard depending on where you\'re looking.
