When you move from one job to another, often there is an old 401k plan at the former employer. You have several choices for what you can do with the old 401k plan, and some options are better than others. Some of the options are dependent upon the balance in your old 401k account, as well. Cash it out. This is typically the worst option. You took advantage of tax-deferral (and company matching) when you contributed the funds to the account. If you simply cash out the old 401k, you’ll have to pay tax on the funds, and if you were under age 55 when you left the employer you will also likely be hit with a 10% penalty for the early withdrawal. In addition to the tax and penalty, when you take a withdrawal from your 401k plan there is an automatic 20% withholding requirement. You will have credit […]
June, 2016:
How to Really Buy a Car
Buying a different car (notice I didn’t say new car) is an event many individuals experience throughout their lifetime. Personally, I have had a number of cars in my lifetime, and I’m sure I’ll have a few more (right now the ol’ mini-van stands at 241,000 miles). My goal is not to spend too much on a depreciating asset, yet make a sensible purchase based on reliability, fuel efficiency and insurance costs. Although some readers may not agree with me, here are some tips on how to really buy a car. Do your homework. Websites such as Kelly Blue Book (kbb.com) and Edmunds.com have valuable information on used car prices, reliability reports, known recalls, expert and buyer reviews and what to expect at the dealership. In addition, obtaining information from these websites gives you bargaining power when you go to purchase your vehicle at a dealership or from a private […]
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Qualified Plan Rollovers
Combining and rolling over various retirement accounts is a decision that many individuals will face during their working career and in retirement. For individuals that are already retired, they may consider combining accounts to make required minimum distributions a bit easier (less paperwork, companies to deal with, etc.). Individuals that are still working may consider combining accounts as they switch jobs in an effort to consolidate plans from various employers to their IRA, Roth IRA or current employer plan. What follows are some considerations as well as a handy guide form the IRS regarding what rollovers and consolidations are allowed and specifics for each plan type. Be sure to check the fees of the plan you’re coming from to the plan you’re considering moving to. While consolidation may make sense, it may be a bad idea if the expenses of the plan and funds are higher in the plan you’re […]
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Net Unrealized Appreciation
This widely misunderstood section of the IRS code can be quite a benefit – if it happens to fit your situation. Net Unrealized Appreciation (NUA) refers to the increase in value of your company’s stock held within your 401(k), either due to a company match or your own investment in the company stock within the 401(k). Other company-sponsored deferred accounts can apply here as well, but the primary type of account is the 401(k), so we’ll refer to all company-sponsored tax-deferred accounts as 401(k)’s for the purpose of this discussion. In order to take advantage of the Net Unrealized Appreciation provision, first of all you must hold your company’s stock in your 401(k), and you must be in a position to roll over the account. That is, either you must have separated from service by leaving employment (voluntarily or involuntarily), or the 401(k) plan is being terminated. As you consider […]
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Early Withdrawal of an IRA or 401k – Medical Expenses
There are several ways to get at your IRA funds before age 59½ without having to pay the 10% penalty. In this post we’ll cover the Medical Expenses which allow for a penalty-free distribution. There are three different Medical reasons that can be used to qualify for an early withdrawal: high unreimbursed medical expenses, paying the cost of medical insurance, and disability. Disability and high unreimbursed medical expenses are also applicable reasons allowing for early withdrawal of 401k funds without penalty. We’ll cover each of these topics separately below. High Unreimbursed Medical Expenses If you are faced with high medical expenses for yourself, your spouse, or a qualified dependent, you may be eligible to withdraw some funds from your IRA or 401k penalty-free to pay for those expenses. The amount that you can withdraw is limited to the actual amount of the medical expenses you paid during the calendar year, minus 10% […]
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5 Things to Check on Your Homeowners Policy
Just because an individual has a homeowners policy or renters insurance doesn’t mean that they are covered for everything. Sometimes individuals assume that because they have insurance, they don’t need to worry about checking into specifics. However, without understanding what may or may not be covered, in the event of a claim, it’s better to know beforehand rather than adding insult to injury and finding out there wasn’t coverage. Flood coverage. In most cases this is excluded on a homeowners policy. Coverage can be obtained separately through a broker found here. Additionally, many policies exclude water or sewer back-up. Individuals concerned about water/sewer back-up can generally get an endorsement for this coverage added to their policy. Trampolines and pools. Individuals that have a trampoline or a pool (or recently acquired these items) should notify their insurance carrier immediately. Some carriers will specifically exclude any liability claims resulting from injury or […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.