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Thursday, February 21, 2008

Before you Cash Out, Catch Up on Choices

Author: Daniel J Wansten | Posted: 20-02-2008 | Comments: 0 | Views: 1 | Got a Question? Ask.

GRAND RAPIDS, MI - There's a growing trend with U.S. workers who change jobs - they're cashing out their retirement accounts. A recent survey of 401(k) participants, done by Hewitt and Associates, shows that about half of employees that leave their jobs choose to cash out their 401(k) plans instead of rolling them over. This trend might seem harmless at the time, but it can jeopardize future retirement.

There are several reasons why people are choosing to cash out now, instead of saving the money for retirement. A common reason might be the increase of health insurance premiums. People aren't used to paying several hundred dollars a month to insure their families. Insurance costs combined with a loss in stock value or other investments; make people feel the need for extra money now. They also believe that they'll make up for it down the road. Many people would rather pay penalties and taxes than wait for a larger return. The rising value of real estate has people believing the value of their homes will replace retirement savings. And it's true that a lot of money can be tied up in real estate, but it shouldn't be your only source for retirement savings.

People need to look at what they will lose by cashing out. You have to pay income taxes on the withdrawal, which could end up putting you in a higher tax bracket. Plus, there's a 10 percent penalty if you're under age 59½ and more importantly, you give up years of tax-deferred compounding. With longer life expectancies, you're going to need enough savings to cover long-term health care. After you look at what you're going to lose, look at why. Is it because you need the money to pay off high interest credit card bills or is it because you don't want to go through the hassle of transferring the money to another account? To avoid regret, you should look at all your choices before making a decision.

Choice #1: Rollover into an IRA - You won't be limited by the investment options in a new employer's plan and you can take distributions from the IRA without penalties under certain circumstances. In short, you'll retain the ability to borrow from the account.

Choice #2 : Rollover into New Employer's 401(k) - Not all companies allow such rollovers. But if you like the plan, the rollover will allow you to consolidate your savings in one place.

Choice #3: Rollover a Portion - It doesn't have to be all or nothing. This can be a great option for those that need money now, but realize they will also need it later.

Choice #4: Liquidate - If it's really going to improve your life, then it can be a viable option. But there's a difference between life and lifestyle. Be careful to distinguish between the two.

We all have trouble saving money, but everyone can do it if they have a plan. If you're unsure about what you should do with your 401(k) or retirement plan, seek the advice of a financial professional you trust. The initial consultation is usually free.

Posted by Suhaimi at 5:24 PM 0 comments
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Panama Banks: Safe, Secure, Stable

Author: Earnest Leibermanso | Posted: 21-02-2008 | Comments: 0 | Views: 2 | Got a Question? Ask.
Panama was once listed as a "non cooperative tax haven" but the small country has worked hard to shed itself of that rogue image. If you are interested in a Panama bank, you should educate yourself about the policies, procedures, risks and benefits involved in doing business with a Panama bank.

Panama has recently tightened its anti-money laundering laws and has created a banking system that is extremely private and highly competitive, but it is monitored well by the international offshore banking community. Doing business with a bank in Panama is generally hassle free. You can rest assured that your assets are being managed in a reputable and safe banking jurisdiction.

Before the major reforms of the mid 1990s, Panama was home to over 150 offshore banks, but that number has been trimmed to around 80 banks. The remaining banks must adhere to strict banking and privacy regulations while at the same time ensuring that illegal activities are not allowed to happen.

Banks in Panama have many advantages over banks in other offshore jurisdictions. The only type of monies that are taxable in the Republic of Panama are those that are generated outside of the country. If you choose to incorporate your business in Panama, but you decide to conduct your business elsewhere, you can deposit all of your assets and earning into your Panama bank without being responsible for paying local taxes on your money.

Panama banks offer many banking services for the banking client that requires a number of different options for their business. There are three types of accounts that you can get at a Panama bank including; merchant accounts, personal accounts and business accounts.

Non-resident Panama bank customers can have Internet account access set up by the bank's management in order to access any necessary account information and in order to transfer funds to and from your Panama bank. It is also easy to apply for and receive a debit, ATM or credit card from a Panama bank to make access to your money even easier.

The majority of banks in Panama require that their potential customers have an initial minimum deposit which can be as low as $1000 USD. Many banks also require that each account must maintain a minimum balance in order to avoid costly fees.

If you decide that a Panama bank is for you, you are able to choose many options. You can open a personal account or you can takes steps to incorporate an IBC or an offshore company. Be prepared to show your personal information and verify your identity by providing a notarized copy of your passport, reference letters and a drivers license or equivalent photo id.

Only you can decide if opening one of the many available accounts at a Panama bank is for you, but you can rest assured that Panama is no longer the place for shady business dealings. The Panama bank system has been cleaned up and offers savvy customers the opportunity to keep their money in a safe account while watching it grow with little tax burden.

Posted by Suhaimi at 5:17 PM 0 comments
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Credit Freeze, Fraud and you

Author: Liz Roberts | Posted: 20-02-2008 | Comments: 0 | Views: 2 | Got a Question? Ask.

What is a credit freeze and what makes it different from credit fraud alert? The credit freeze was first introduced in California in 2003. Today, however, a credit freeze can be done in all 38 States and can be requested from any of the three major credit bureaus- Equifax, Experian and TransUnion.

Once a consumer puts a freeze on his credit , no lender, insurer, employer or anyone else can make an inquiry or request on his credit report. The fact is, not even you, can look into your credit report unless you order the credit bureau to "unfreeze" or "thaw" your credit.

Unlike a credit fraud alert which only lasts for up to 90 days, a credit freeze will last for as long as the owner of the report doesn't request that his report be thawed. Therefore, if you want to apply for a new credit card or you plan to get a loan, you need to notify the credit bureau in advance to get the freeze be lifted.

The unfreezing of the credit report can take from within minutes or up to a week, depending on the State or the credit bureau issuing the report. You have the option to choose whether you want to unfreeze your credit report permanently or for just a limited time period. Also, within this period, you can limit the list of people who can look in your report.

Why Freeze your Credit

Putting your credit report on a freeze definitely gives you more protection from identity theft or fraud. Going through the procedures of freezing and unfreezing and paying a certain amount, usually about $10 each time is definitely worth spending your money on rather than risk being victimized by ID theft or fraud.

How do you ask for a credit freeze?

A fraud alert can be done by phone but if you want to freeze your report, you need to send a letter of request to the credit bureau via registered mail. Generally, at least two proofs of residency such as a billing statement or a copy of your driver's license is required. The cost for a credit freeze ranges from $10 to $12. Unfreezing or thawing will also cost you about $10 to $12 for each bureau.

More Credit Precautions

But aside from putting your credit report on a freeze, what other steps can you do on your own? Here are valuable tips you should not overlook:

* Shred all receipts, past billing statements, and old documents that contain your bank information or any of your personal details on it. If you don't have shredder, tear the document into tiny bits and throw the pieces in separate trash bins.

* Don't write your bank information, credit card numbers, PIN codes or passwords on just any sheet of paper. Keep all these important details in one log book and keep it in a secured place or a locked storage.

* If you want to use your credit card for shopping online, ask your credit card company for a different credit card number that you can use exclusively for online transactions.

* Access your online account regularly. Most credit cards today provide an online account service where you can check the status of your account over the internet at any time. Thus, you don't have to go out of your way to visit your local bank to update yourself. It takes only five minutes at most to access your account from your computer.

* Sign up for your credit card's fraud protection service. Some credit cards provide this feature automatically but if your credit card doesn't, it's a good idea to sign up. This service will give a quicker response from your credit card issuer in case your wallet or your credit card gets stolen.

* If you need to get in touch with an agent from any of three credit bureaus- Experian, Equifax or Trans Union- by phone, visit gethuman.com to access the latest contact numbers where you can speak with a human representative from the credit bureaus and not just a recorded message.

Posted by Suhaimi at 5:12 PM 0 comments
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