Options For Your Money In Employer-Sponsored Retirement Accounts When Switching Jobs.
The new issue of T. Rowe Price Investor magazine just showed up here, and as usual it’s got some great stuff in it. (All of our retirement/mutual funds are held over there) This month they have an article on 4 paths you can follow with your retirement savings that were held in an employer-sponsored savings plan, when you switch jobs:
Roll The Money Into A Rollover IRA
Pros Include:
Maintains tax-deferred status
Allows penalty-free withdrawals for certain circumstances
Leave The Money In Your Former’s Employer’s Plan
Pros Include:
Maintains tax-deferred status
Offers familiar investment options
Allows for penalty-free withdrawals if you separate from service and are 55+ (in most cases)
Cons Include:
May have minimum balance requirements
May restrict withdrawal options for beneficiaries
Move The Money Into Your New Employer’s Plan
Pros Include:
Maintains tax-deferred status
May permit loans
Allows for penalty-free withdrawals if you separate from service and are 55+ (in most cases)
May allow for delayed minimum distributions while you are still working
Cons Include:
Limits investment options to those of the new plan
Limits your access to withdrawals if you are still employed
May involve a waiting period prior to moving your money
May restrict withdrawal options for beneficiaries
Cash Out From Your Previous Employer’s Plan
Pros Include:
Provides immediate access to retirement plan assets
Cons Include:
Removes potential for tax-deferred growth and compounding
May incur an immediate 20% withholding on the distribution for prepayment of federal income taxes
Generates a 10% early withdrawal penalty if under 55 years old
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People Here Don’t Give A Crap What Kind Of Car We Drive.
And believe me, that is a welcome relief after living in Los Angeles for 13 years. Granted, I will be the first to admit that when I was in my early to mid-twenties, I definitely cared about what everyone else thought of my clothes and my cars. I think most people do care up until a certain age, and I was no different. I bought nice clothes, expensive cars, went out to eat way too much, and just charged myself into credit card debt - all to try to impress other people. I fell for that lifestyle hook, line and sinker - and found myself staring at a lifestyle I could not afford and tens of thousands of dollars in credit card debt…for nothing! What did I have to show for it? Not much! In the last 5 years of living in Los Angeles I got over myself and stopped caring so much, worked to pay off the debt, bought cheaper cars, and overall revamped my lifestyle so that it was affordable…after all, I didn’t really care anymore what Los Angelenos thought of my belongings. But I had no idea that there were places where people did not care at all, not one iota - until we moved here.
And it seems to me that most people are happier because of it.
We are not in a competition here to see whose rims are shinier, whose stereo is louder, whose house is bigger or who has the coolest new clothes. No one here it into talking about where their second home is, where they vacation, or where they sent their kids last summer. People here are just living…and it is something that we are settling into quite nicely. Everywhere we go, people wave and say hello, even if you just happen to both stop at a stop sign at the same time. I don’t know any of these people yet; I just moved here 2 months ago. But yet the majority of people treat everyone as a friend or family member, like “we are all in this together”, and it is quite refreshing. In L.A., if you took an extra 2 seconds at a green light to start moving, you got blaring horns and 3 middle fingers. Here? Nothing…people are patient and not in a hurry to blast their way down the street. It is so different from where we came from and I have already felt my blood pressure drop!
The state car seems to be a Subaru, as that is what most people drive. Not exactly a status-symbol, huh? And not a single one of them is clean and shiny like in Los Angeles, as they are all covered in mud, the tires are brown and filled with stones, and many windshields are cracked. I used to get our cars washed every week or so in Los Angeles, where the only dirt they got on them was from the pollution. Here? I hosed off the car once in the past 60 days…it’s just how it is around here.
I guess my point is that it just shouldn’t matter to anyone else what you drive, what clothes you wear, what restaurants you eat at, or where you go on vacation - and we have found a place where nobody cares about any of that stuff and it is an amazing feeling to be free of those feelings. As much as we tried to live that way in L.A., we still came in contact with people who looked down on you because you drove a Subaru rather than a BMW, or you worked as a teacher rather than as a TV producer. It was quite unhealthy but we didn’t realize just how bad it was until we moved away. I like nice things as much as the next guy, but when and if I were to buy them they would be for me, and not because I thought anyone else would be impressed.
If you spend your life trying to impress and keep up with everyone else, you are not living your own life but rather living theirs. Living on your own terms saves money, saves your sanity, and saves your dignity!
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Settlement Gives Everyone Free Copies Of Their Credit Report & Score.
If you have already used up your free credit reports for 2008 (I have one more to use in the last quarter of the year), a settlement of a class-action lawsuit that was filed against Transunion lets you get your report and your score, as often as you want, for 6 months. Transunion had allegedly sold customer profiles to third parties and got caught - thus the settlement.
If you want to sign up to get your reports and scores for the 6 months, just head over to listclassaction.com and register for the service. And as much as I hate when petty class-action lawsuits get taken advantage of, I think this one has merit and everyone should take the time to register for their free scores!
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How To Frugally Decorate Your House On A Very Tight Budget.
Although I don’t really care too much about having designer this or fashionable that in my house, we do like to live comfortably within our means, and we are not above buying used furniture to accommodate our lifestyle! Over the years we have bought used tables and lamps at consignment shops and garage sales, saving ourselves a ton of money in the process. Why buy a new hardwood dining table at a store like Pottery Barn, when you might be able to get something just as well made (or better) second hand? It’s wood and nails - no need to buy new if you don’t need to! So giving some thought to decorating your house on a budget, I put together this list of places to check out before your next shopping trip!
Sources For Used And Cheap Furniture
Sources For Used And Not-So Cheap Furniture
Sources For New But Inexpensive Furniture
If you like to shop frugally for your home, where do you go first? Let everyone know in the comments!
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Sunday Money Roundup - Broken iPhone Edition.
Whoo-hoo, I get to drive 2 hours down to the Apple store in Albuquerque to have them take a look at my iPhone, which has what looks like lightning going across the screen. It’s inside the screen, so I know it’s not anything I did…but still, it’s not even a year old. Luckily it is under warranty, so we shall see what they give me or if they can fix it. Sigh…
My Two Dollars took part this week in the Festival of Frugality No. 139: The Michael Phelps Edition. Thanks for hosting the Festival! And now, here are some articles that caught my eye this past week:
Money Ning is addicted to saving and wants to tell you why you should be too!
Patrick from Cash Money Life has gathered together the best gas rewards credit cards. With gas prices this high, we need all the help we can get.
Remodeling This Life wants to know what motivates you. Posts like these are why I truly enjoy reading Emily’s site; go check it out.
Paid Twice has paid off over 50% of their family’s debt in about 1 year. What amazing progress, and if you are paying off debt this should be a great source of inspiration for you!
Blueprint For Financial Prosperity asks if you think any frugal changes you have made will stick if times change. I truly believe ours will because we see those type of changes as lifestyle choices rather than short-term solutions. What about you?
My Dollar Plan is leaving the workforce at 29…and is very excited and nervous. Go wish her luck and see what she is going to be up to!
One Caveman’s Financial Journey has some great advice on saving money on paint for your home. As someone who likes to change paint colors several times a year, this could come in handy!
Get Rich Slowly talks about the myth of multitasking - how when you try to do it all, nothing gets done. It took me years to figure this out, but I am starting to see the wisdom in doing one thing at a time!
Lazy Man & Money wants to help you save money while dining out at restaurants. Who couldn’t use tips to save money on eating out? I wish I could eat out every night of the week!
Silicon Valley Blogger has a post up that everyone in the working world should read - “Best Company To Work For: Money and Perks Like No Other “. Although, I gotta say that working for myself is better than working for any company I have ever worked for!
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Money Quote Friday - Live The Perfect Day Edition.
- Ruth Smeltzer
And with that, we are headed to the County Fair to enjoy us a livestock competition and some fried dough. Have a wonderful weekend everyone!
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