Monday, September
6 2010
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Monday, September
6 2010
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Announcing a new acquisition!!
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What's New at Forte for the year 2009 May 2009 - Don't Let Economic Troubles Threaten Your Retirement Plans By Forte News Department As the economy has worsened, not only have
retirement funds dropped in value with the market, but also many people have
been tempted to tap savings as a way to cut debt or otherwise shore up their
finances after a job loss. Still more have found that employers have dropped
matching contributions to shore up their own finances. Worry about retirement seems to be widespread. A
January survey by the National Institute on Retirement Security noted that 83
percent of Americans are concerned about their ability to retire. Yet the worst thing you can do is tap or give up on
your retirement funds. No one can know with any certainty when the investment
markets will rebound, but even if you can contribute something, you stand to
gain once markets start to rebound.
Even more important, you risk penalties and the lost potential for the
earnings if you turn your back. Before you make a move, seek out some advice. It’s a
good idea to check in with an expert such as a Certified Financial Planner™
professional to see where your retirement funds stand in light of all your
finances before you do anything. In the meantime, here are things you can do to put
your retirement funds in better shape. Don’t
stop funding your 401(k) under any circumstances: In March, the Spectrem Group, a Chicago-based
consulting firm, reported that 34 percent of U.S. employers have reduced or eliminated
matching contributions to their defined contribution retirement plans – which
include 401(k)s and 403(b)s – since January 2008. The Pension Rights
Center reports that besides the Big Three automakers, dozens of major companies
have cut back their match, including Motorola, Starbucks, and JPMorgan Chase
& Co. It’s a significant impact. US
News & World Report recently reported that a worker who earns $50,000
annually and receives a full employer match of 50 cents to the dollar on six
percent of his or her pay, the match cut means $16,000 less for retirement. An
employer dropping its contribution is bad news, but you should make every
effort to keep up with your contribution because if you don’t, you’ll miss
valuable tax deductions and the chance to build your funds more effectively for
the long term. Stay
invested: Because no one precisely knows when the market is
headed up or down it’s best to stay invested at a time when everyone is waiting
for a rebound. Keep in mind that the
market’s top performing days typically come at the start of a recovery, so
leave your money in your 401(k) and IRAs. Keep
in mind that withdrawing or borrowing your funds can be costly: If you
have an emergency situation, be careful. Workplace 401(k) plans do allow for
hardship withdrawals, but you might have an option to take a loan, which would
save you the taxes and the 10 percent penalty that accompany hardship
withdrawals for account holders under the age of 59. The majority of 401(k) plans allow you to borrow up
to 50 percent if your vested account balance or $50,000, whichever is less. Adjust your spending so you can save
more: If you have an existing Roth or
traditional IRA or other means of saving for retirement, do whatever you can to
get more money into these accounts. It may not come close to meeting the
shortfall from losing an employer’s contribution or the chance to add to a
401(k) after you’ve lost your job, but it’s critical to keep some savings
going. June 2009 — This column is produced
by the Financial Planning Association, the membership organization for the
financial planning community, and is provided by David W. Henion CPA, a local member of FPA. | ||||||||||||||
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