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About Retirement Calculator, Inc.
Retirement Calculator, Inc. provides the tools and resources necessary to assist you in making critical economic decisions regarding your retirement future.CBS The Early Show
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Asset Allocation
Often financial "experts" make asset allocation difficult to understand. My goal in this series of articles is for you to understand asset allocation thoroughly, in an easy to understand format.- FREE Retirement Calculator recommended by Ray Martin on the CBS Early Show - Watch the video clip
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| NATIONAL OVERNIGHT AVERAGES | TODAY | +/- | LAST WEEK |
| 30 yr fixed mtg |
|
5.00% |
|
5.03% |
| 15 yr fixed mtg |
|
4.35% |
|
4.38% |
| 5/1 ARM |
|
3.87% |
|
3.91% |
| 30 yr fixed jumbo mtg |
|
5.82% |
|
5.87% |
| 5/1 jumbo ARM |
|
4.47% |
|
4.49% |
| NATIONAL OVERNIGHT AVERAGES | TODAY | +/- | LAST WEEK |
| $30K HELOC |
|
5.12% |
|
5.13% |
| $50K HELOC |
|
4.85% |
|
4.85% |
| $30K home equity loan |
|
7.82% |
|
8.15% |
| $50K home equity loan |
|
7.71% |
|
8.10% |
| $75K home equity loan |
|
7.73% |
|
8.14% |
| NATIONAL OVERNIGHT AVERAGES | TODAY | +/- | LAST WEEK |
| 36 month new car loan |
|
6.64% |
|
6.69% |
| 48 month new car loan |
|
6.77% |
|
6.85% |
| 60 month new car loan |
|
6.83% |
|
6.89% |
| 72 month new car loan |
|
6.03% |
|
6.03% |
| 36 month used car loan |
|
7.00% |
|
7.08% |
| NATIONAL OVERNIGHT AVERAGES | TODAY | +/- | LAST WEEK |
| 6 month CD |
|
0.80% |
|
0.82% |
| 1 yr CD |
|
1.20% |
|
1.24% |
| 5 yr CD |
|
2.57% |
|
2.61% |
| 1 yr IRA CD |
|
1.07% |
|
1.12% |
| 5 yr IRA CD |
|
2.16% |
|
2.39% |
The Truth About Borrowing Against Your 401k
Retirement Calculator, Inc.borrowingagainst401k.com
The Truth About Borrowing Against Your 401k Sometimes, when you put all of your effort into saving for retirement, you get to a point where you need a bit of extra money. Maybe your children's tuition payments are due. Maybe you have medical bills that need to be paid. Or maybe you're planning to buy a home of your own and you need to come up with money for the down payment. So you start wondering where the money is going to come from. And you start to think about borrowing against your 401k. There are some advantages to borrowing against your 401k. Typically, you will be able to get the money that you need quickly. There isn't a lengthy approval process because the money that you will be borrowing is -ultimately -your own. Further, when you are borrowing against your 401k, you are not actually withdrawing the money from the account, and therefore you will not have to pay the 10 percent penalty -though you will have to pay back the money that you borrow with interest. Of course, just as borrowing against your 401k has advantages, it also has disadvantages. Because you have borrowed the money from your 401k, it is no longer in the account and therefore no longer earning interest. Also, because your 401k account is controlled by your employer, typically the money that you borrow from your 401k will be paid back in deductions from your paycheck. Therefore it is important to consider that borrowing from your 401k will affect your income -both now and after you've retired. And there is one other thing that you should consider before borrowing from your 401k -what would happen if you were to leave your job. If you leave your job -whether it's because you've found something better or the company has chosen to downsize -you are responsible for paying back all of the money you have borrowed from your 401k. If you can't, then you will be responsible for paying the taxes and the 10 percent early withdrawal penalty for removing money from your 401k account. Because of the disadvantages of borrowing from your 401k, you need to make the decision very carefully. You should take the time to take a closer look at all of your savings and investments before you borrow against the account. One way to get a closer look at all of your retirement accounts when you need to come up with some extra money is to download our free retirement calculator. With this retirement calculator, you'll be able to evaluate the way all of your retirement savings accounts -as well as the stocks, bonds and mutual funds in which you've invested -to see how they have performed over time. Further, you will be able to get projections about how your savings and investments will perform over the next 25 years. Those projections will take into consideration changing interest rates and the effects of inflation on your retirement savings. But even more importantly, you'll be able to take a look at the way changes that you make to your savings and investment strategies will affect the income that you have when you retire. These changes may be investing in different stocks or mutual funds. These changes might also be withdrawals from your retirement savings. If you have any questions after you've used our retirement calculator, you'll be able to get answers: when you download our free retirement calculator you will also be contacted for a free one-on-one consultation with a financial advisor. You'll be able to ask about borrowing against your 401k and whether or not it is the best idea for you. You'll be able to develop a plan for getting the money that you need and you'll be able to make sure that your retirement savings will still provide you the income that you need when you retire. If you're thinking about borrowing against your 401k, you owe it to yourself to make sure that you are making the right decision. Understand borrowing from your retirement savings and the way that it will affect the income you have once you no longer have a steady paycheck. Click the red button below to download our free retirement calculator and get the information that you need to make an informed decision. |
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Analysis of the Economics of Early Social Security Withdrawal
Robert J. Phillips
Chief Retirement Consultant
Deciding whether or not to take the early withdrawal of social security at age 62 can be difficult. If you need this income at 62 to fund your retirement the decision is fairly straightforward. Take it early! On the other hand, if you have another source of revenue to fund your retirement your decision will be primarily based on lifestyle, health and investment preferences.
Several factors can affect your decision. First is your life expectancy. If you are in good health and have a family history of living beyond 90 then waiting for full benefits may be best. Two other factors impact this decision. First and most important is the value of money or your expected return from your investments. If you are using other investments instead of social security to fund your retirement you should use the rate of return of these investments as your value of money. There is another way to look at the value of money. If you do not require the social security money to live, you can invest the distributions for the future. The rate of return of this investment is your value of money. If your investments will make larger returns such as stocks this would favor taking the early withdrawal.
The last factor impacting your decision is inflation. Social security includes an annual adjustment based on inflation. You cannot control this variable but you should be aware of its impact. If future inflation is significant it will favor a later full distribution
FREE Social Security Calculator:
Find Out Your Breakeven AgeWe developed a calculator to assist in analyzing the impact of taking early benefits at age 62 or waiting for full benefits at age 66 to 67 depending on the year you were born...If you were born in 1960 or later your full benefits will begin at age 67 and your reduction for early benefits at age 62 will be 30%. If you were born between 1946 and 1960 your full benefits begin as early as age 66. We have included a chart that summarizes information.
To use the calculator you need to input your year of birth. You also need to input a value of money up to 10% and a projected inflation adjustment. The calculator analyzes income generated over time from both the early and full benefit investments. It calculates the age at which full social security will catch up and breakeven with the early withdrawal. If you were born before 1960 your breakeven age will be impacted by the year you were born. An early breakeven age favors waiting for full benefits.
The social security calculator is not the final answer whether to take an early withdrawal but it does give you additional economic data to assist in that decision. Ultimately you must balance income, investments and lifestyle to optimize your enjoyment during your retirement years.
