7 Simple Home Improvements to Beat the Winter Blues

by Posted in Apartment DIY, Home Buying, Home Improvement Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Winter can be a tough time of year for many of us, especially after all the holiday excitement dwindles down. It’s cold. It’s dark. It’s gloomy. And this is when many of us start to feel the winter blues settling in. 

But there is good news. By planning out a few simple home improvements you can easily transform your space into a happier and cozier place to be, while also enjoying time spent inside. Sprucing up your home can feel good during any season, but certain projects are perfect for giving you a much-needed mood boost during this time of year. 

So, if winter is getting you down, consider these home improvement projects to help you beat those winter blues, no matter how short the days are or how low the temperatures drop.

painted living room

1. Repaint living spaces

Feeling like your home is in need of a dramatic change? A new coat of paint can be a cheap and effective way to switch things up in no time. During this time when many of us need a mood booster, take a page out of the psychology book, and surround yourself with colors that help you relax and increase happiness. In general, cool colors have a calming effect, while warm colors add comfort and can be invigorating. White can help brighten rooms by reflecting light. It makes a small space feel larger and more open, which can help you feel more energized.

Painting can require some patience, especially if you are considering a brand new color, but it’s easy enough for even a DIY beginner to accomplish. And, with the right attitude and a few friends or even some favorite music, you can make repainting your walls fun, too. If you’re feeling overwhelmed by your painting project, consider hiring a local painting company to tackle it for you.

kitchen lighting

2. Update your home’s lighting 

What better way to brighten and warm your spirits this winter than with the perfect lighting. Not to mention it’s an easy and affordable way to make your home a more comfortable place to spend time.

Instead of sticking with whatever fixtures came in your home when you bought it, you can use the doldrums of winter as an excuse to try this simple home improvement. Light fixtures are affordable and can often be installed without an expert. Whether you repurpose your holiday string lights or invest in a daylight lamp, the options are endless. You can also completely change the ambiance in your home simply by replacing any harsh white bulbs with calming yellow ones.

skylights in living room

3. Maximize natural light with windows or skylights

With the shorter days and gloomy weather, one of the main factors leading to winter blues this time of year is the lack of natural light. The best solution for this is to increase the amount of sunlight in your home. If your current windows aren’t letting in enough light or air, it may be time to upgrade. 

Skylights can also be an excellent way to improve natural light. This is true even if you live somewhere like Miami, where the sunlight is abundant. Skylights can be installed in many areas of your home, with kitchens and baths being among the most popular choices. Adding more light and sun can go a long way in making the winter darkness a little easier to manage.

simple home improvements bright entryway

4. Install a sound system

There’s nothing like a great song for instantly lifting the spirits. Playing some of your favorite tunes at home is the perfect remedy to help fight your winter blues. It’s a bit less impactful, though, when you’re listening to music through tiny laptop speakers. If you want to really immerse yourself in the sound of your favorite songs, invest in a home sound system.

Setting up a surround sound system or a sound system that plays across multiple rooms is quite simple. Modern technology allows for easy connectivity with Bluetooth, ensuring your home is ready for fun without a costly or complicated setup process.

simple home improvements bathroom

5. Improve organization

After spending months inside due to the pandemic, followed by the holidays, your home may be overrun by clutter. Think about how good you’ll feel when you’ve cleaned your house, and everything has been put back in its rightful place

Improving the organization of a space can occur in a number of ways, from purchasing storage boxes and bins to custom pieces for the closet. A few simple home improvements can go a long way. Whether that’s just going through old mail, sorting clothing to donate, or filing papers, organizing can help create a nicer living space. If you’re feeling overwhelmed with the process, bring in a professional organizer or declutter to help.

6. Add greenery to beat winter blues

Plants are amazing gifts of nature. In both work and home environments, live plants can boost your mood, productivity, concentration, and creativity. Plants come in all shapes and sizes, from tiny succulents to large potted plants, making greenery a functional and flexible option for everyone. You can choose from flowers, greek plants like ferns, or even herbs to add color and life to any room.

If you have a large living area, potted trees can also be an excellent addition and one of the simplest home improvements you can do. Available from local nurseries and mail order services nationwide, plants make it easy to add a dynamic living focal piece to any room.

bedroom sanctuary simple home improvement

7. Create a bedroom sanctuary

There’s nothing quite like having a cozy place to escape to on a cold winter day. From fluffy blankets and bedding to essential oils and warm, ambient lighting, your bedroom can be a place of peace from the moment you walk in. Flannel sheets can keep you nice and warm while a plush rug to sink your toes into will add comfort. 

Making it through yet another winter may seem tough, but a few simple home improvements can be just what you need to turn a cold-weather frown upside down. From a little repainting to installing skylights, there’s plenty you can do to increase your happiness and take your home from bland to beautiful this season.

The post 7 Simple Home Improvements to Beat the Winter Blues appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.

Source: redfin.com

Zillow study illustrates home value disparity between races

by Posted in Apartment DIY Tagged , , , , , , , , , , , , , , , , ,

Typical values for Black and Latinx-owned homes still lag behind overall U.S. home values, but the gap is narrowing.

A new Zillow analysis shows homes owned by Black and Latinx households are worth 16.2% and 10.2% less, respectively, than the typical U.S. home. Homes owned by non-Hispanic white and Asian families, meanwhile, have typical values 2.9% and 3.7% higher than the typical U.S. home.

While inequity in home values continues to persist, the data show them steadily, albeit slowly, converging. Since homeownership is the single largest driver of wealth for many households, the value and appreciation of a home is extremely impactful for families.

Before the Great Recession, the gap between Black-owned home values and all home values was about 15%, but grew to 20% by March 2014. Similarly, Latinx-owned homes saw the largest home value gap in May 2012 at 14% — 2 percentage points larger than before the housing bubble. Now, nearly a decade later, home values for Black- and Latinx-owned homes are back at pre-bubble levels, and continue to narrow despite the current economic crisis.

One reason for the wide gap is that the housing bust hit communities of color especially hard. Subprime loans were targeted to take advantage of the most vulnerable communities, and the ensuing wave of foreclosures hurt homeownership and home values disproportionately for Black and Latinx homeowners. Fast forward 12 years, and homeownership rates and home values are still recovering for these communities. While home value growth turned positive for U.S. homes in August 2012, it took an additional two years for Black and Latinx homes to see this same growth.

“It has taken nearly a decade for the home value gap to return to pre-recession levels, but still, the gap remains very large,” says Zillow economist Treh Manhertz. “With Black and brown communities and jobs hit disproportionately hard in the pandemic, there has been reason to worry another dip may be on the horizon that could slow or stop the progress. However, this is not the case, as the same factors that widened the gap in the Great Recession are not surfacing this time. Thanks to rock bottom rates on the most secure mortgages, extended forbearance programs, and rising home prices, there are no signs of another widening of the gap coming this year. However, through these turbulent times, continued vigilance and targeted intervention by policymakers is crucial to keep the progress going for communities of color.”

Home value inequality varies greatly in different states and metropolitan areas. Large metros with the smallest spread between Black-owned home values are Riverside (1% value gap), San Antonio (3%), Las Vegas (3%), and Portland (4%). Among the most unequal are Detroit (46% value gap), Buffalo (43%) Birmingham (43%), St. Louis (41%), and Milwaukee (40%).

Black homeownership rates are also on the rise since the Great Recession, despite challenges for Black homebuyers to secure a mortgage. Telework has the ability to expand the opportunity for homeownership even further for Black and Latinx renters, providing the flexibility to own a home in a less-expensive area.

The post Zillow study illustrates home value disparity between races appeared first on RealtyBizNews: Real Estate News.

Source: realtybiznews.com

Is Pet Insurance Worth It?

by Posted in Mortgage, Pets Tagged , , , , , , , , , ,

Happy Wednesday everyone! I had a great weekend and I hope you all did as well. Here’s to a great 2013!

The other day I received an e-mail from a reader who was wondering about pet insurance. I don’t have pet insurance, but it is something that I wonder about.

I’m writing this post more as a way to ask all of you: do you have pet insurance? What do you think of it? And also, how much does it cost?

I noticed that a vet near my house offers a “wellness plan.” It’s not exactly insurance but if your dogs are sick, then you are able to bring them in as many times in a year as you would like, and it also covers other things such as checkups and vaccinations.

The cost was around $300 per year I believe. At what point would this be worthwhile and when would it not be? Also, this is not insurance, so would you buy both or just have one of the other?

I love my pets and will spend whatever is necessary in order to ensure that they are in the best of health. One of our dogs is a French Bulldog and also a runt, so we do know that he has a TON of expected medical bills in the future.

I do see my dogs as a part of my family. I don’t care how many of you say that I am crazy. If pet insurance is truly worth it and the monthly costs are not excessive (in which just saving myself would be better) then I definitely plan on signing up. Sometimes procedures can cost thousands of dollars, and in the case that happens I would like insurance to lessen the burden.

Do you have pet insurance? What do you think of it?

And of course, how much do you spend each month on it?

The post Is Pet Insurance Worth It? appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

Is Pet Insurance Worth It?

by Posted in Mortgage, Pets Tagged , , , , , , , , , ,

Happy Wednesday everyone! I had a great weekend and I hope you all did as well. Here’s to a great 2013!

The other day I received an e-mail from a reader who was wondering about pet insurance. I don’t have pet insurance, but it is something that I wonder about.

I’m writing this post more as a way to ask all of you: do you have pet insurance? What do you think of it? And also, how much does it cost?

I noticed that a vet near my house offers a “wellness plan.” It’s not exactly insurance but if your dogs are sick, then you are able to bring them in as many times in a year as you would like, and it also covers other things such as checkups and vaccinations.

The cost was around $300 per year I believe. At what point would this be worthwhile and when would it not be? Also, this is not insurance, so would you buy both or just have one of the other?

I love my pets and will spend whatever is necessary in order to ensure that they are in the best of health. One of our dogs is a French Bulldog and also a runt, so we do know that he has a TON of expected medical bills in the future.

I do see my dogs as a part of my family. I don’t care how many of you say that I am crazy. If pet insurance is truly worth it and the monthly costs are not excessive (in which just saving myself would be better) then I definitely plan on signing up. Sometimes procedures can cost thousands of dollars, and in the case that happens I would like insurance to lessen the burden.

Do you have pet insurance? What do you think of it?

And of course, how much do you spend each month on it?

The post Is Pet Insurance Worth It? appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

21 Side Hustles for Teachers In and Out of the Classroom

by Posted in Money Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Educators are the ones that ignite a love of learning inside each of us and help mold us for future success in life. They’re essential to student growth, invaluable in their communities, work countless hours preparing lessons, and care for their students. Despite all of their dedication and responsibility, it’s a well-known fact that educators are often underpaid, and many turn to side hustles to make ends meet. 

If you’re a teacher looking for a way to supplement your income, there are many part-time opportunities that can fit your schedule and skillset. Whether you’re looking for work through the summer, or an extra gig for nights and weekends, we’ve put together this complete guide of side hustles for teachers. 

Jobs to Keep You Teaching

Jobs Online and On Apps

Jobs to Get You Outside

DIY Work From Home 

 
$17.53 an hour, though it varies widely by experience and specialty.

  • Get started: Register online to become a tutor through sites like TutorMe, Tutor.com, and VaristyTutor, or set your own price and let parents at your school know you’re available.

2. Standardized Test Administrator

While test administrator requirements will vary across states and school districts, it’s needed everywhere there are schools. Administrators ensure that all testing procedures are followed, that no test materials are taken from the site, and that all tests are collected and submitted securely for grading. As schooling moves online, there are also plenty of opportunities to proctor exams from home. 

  • Pay: Test administrators earn between $32,500 and $43,500 on average for full-time work, and can earn as little as $24,000 a year.
  • Get started: Find your state testing service’s site to learn more and apply to become a test administrator. You can also apply to become a proctor with online proctoring companies like ProctorU.

3. Teach English Abroad 

Do you dream of traveling the world? Teaching abroad during the summer months is a great way to strengthen your skills as a teacher and experience other cultures. There are great options for short-term teaching jobs abroad, or you can teach foreign classrooms from home.  

  • Pay: This varies by region, but reaches as high as $5,000 a month. Keep in mind that some gigs cover room and board, while others require you to budget your own living costs.
  • Get started: You can learn more about the process and regions through International Schools Service and find international teaching jobs with sites like Teachaway and Go Overseas.

4. Adjunct Community College Professor 

More people are opting for community college to save on tuition, and there’s an increased demand for teachers in these programs. While some colleges may require a Master’s degree for employment, others only require a Bachelor’s and relevant teaching experience. Becoming an adjunct professor or teacher at a community college is a great way to continue teaching and change lives in a meaningful way. 

  • Pay: Adjunct faculty make a median of $2,700 per three-credit-hour course, though this varies between institutions and experience.
  • Get started: Check out the education requirements at your local colleges to see where your experience would be accepted. Then, decide what you want to teach, meet with a few other professors, and apply. 

5. Babysitting or Nannying 

Parents are always looking for someone responsible to watch after their little ones, and who better to trust than a teacher? Babysitting and other forms of childcare on nights and weekends is a flexible option that allows you to continue spending time with children while earning some under-the-table cash. 

  • Pay: Pay varies significantly by experience and location, so use this babysitting rate calculator to determine a fair price for your services.
  • Get started: Contact families you know for a smooth start to babysitting, or use sites like Care.com to match with families. You’ll likely need a background check to find nanny gigs online. 

 
Gridwise provides pay averages for major cities as well as other costs you should consider.

  • Get started: The first step is to download the app of your choice, then collect and submit the company’s required information. For example, Lyft requires:
    • At least one year of licensed driving experience
    • Pass both a DMV and criminal background check
    • Have your car inspected by a licensed mechanic
    • Drive an approved vehicle model

7. Delivery Services

If you’re not comfortable driving strangers, then you may want to consider delivery or shopping services instead. You can choose to deliver packages for companies like Amazon Flex, or deliver food and groceries as people need them. 

  • Pay: The average worker makes around $200 a month, though it’s heavily dependent on tips, location, and company.
  • Get started: Decide what you want to deliver, then choose the app that works best for you.
    • Postmates and Favor deliver everything from groceries to office supplies
    • DoorDash, Uber Eats, and Grubhub specialize in restaurant delivery
    • Shop and deliver groceries with Instacart and Shipt

8. Rent Out Your Extra Space 

If you have a spare room or apartment, you can rent it out for long- or short-term stays through services like Airbnb. This process is extra simple as you just have to set the dates and keep a clean and desirable place to stay. Just make sure you have updated insurance to cover any potential damages. 

Airbnb has over 7 million listings worldwide and has served over 750 million guests.

Even if you don’t have a room or home to rent, you can rent out parking spaces, lawns, swimming pools, and more. 

  • Pay: Airbnb hosts can make an average of $924 a month — the highest income of all gig economy services.
  • Get started: Register your space for free after deciding your rates, rules, and available hours. You can also check out these other sharing gigs to consider:
    • SniffSpot to share your yard with dogs
    • Swimply to rent your pool
    • JustPark and Spacer offer your parking spaces
    • Spinlister lets you rent sporting equipment
    • Getaround allows you to share your car when not in use

9. Virtual Assistant 

While a virtual assistant (VA) likely has some level of administrative work to do, they offer a number of different services including customer support, human resources, bookkeeping, and more. Most VAs are required to have experience in some type of administrative role. 

  • Pay: Virtual assistants make an average $15.77 an hour, but the pay can reach $27 an hour depending on experience and job needs.
  • Get started: A virtual assistant is their own boss, so you’ll want to follow some of the basic steps to building a business. Checkout Dollarspout’s guide to get started. 

10. Online Surveys

Online surveys may not be the most lucrative side hustle, but the money can add up. They’re convenient, quick, easy, and there are plenty of platforms to use online and on your phone. It’s a good option if you’re just looking for a little extra spending money. 

  • Pay: Each survey pays anywhere from $.10–$3, and there’s usually a minimum earned amount to reach before you can cash out. 
  • Get started: Choose a site like Swagbucks or InboxDollars to start receiving surveys and earning money. You can also earn Google credits you can use immediately with Google Opinion Rewards.

 
$15, but your location will affect prices. If you walk dogs for another company then you’ll have to pay them a cut, too.

  • Get started: Reach out to friends and neighbors to work independently, or join a service like Wag or Rover.

12. Tour Guide

If you live in a historic city or neighborhood, there may be an opportunity for you to offer walking tours of your area to summertime visitors. It’s a great opportunity to look at your city through a new lens and teach others about the area you love. Plus, being a guide will allow you to practice your public speaking skills, and you can use your knowledge of the area for future lesson plans! 

  • Pay: Tour guides make anywhere from $10–$20 an hour with an average of $24,343 a year base pay.
  • Get started: Jump right in as a peer-to-peer guide with Tours by Locals and Shiroube, or reach out to local organizations and attractions to see who’s hiring.

13. Summer Camp Counselor 

Relive your childhood memories of playgrounds, arts and crafts, and water balloon fights, not to mention spend all day in the gorgeous summer sun. You’ll be accustomed to the responsibility that comes with watching children all day, and you can let loose and have fun as a camp counselor.

  • Pay: Day camp counselors earn an average $10 an hour, and managers can make up to $20. Overnight camps pay a couple dollars more at an average of $13.
  • Get started: Local church, YMCA, and Parks and Recreation organizations often host summer and school break camps. You can also search other cities and overnight camps for a more unique camp experience.

14. Lifeguard

There’s nothing better than spending the summer in the sun, and lifeguarding is a great way to do that while protecting others. The American Red Cross offers lifeguard and water safety courses year-round, which will help you earn the necessary certifications and skills for the job.

  • Pay: Lifeguards earn an average of $12 an hour, though job experience may earn you a boost.
  • Get started: Once you complete your lifeguard training, you can apply to be a lifeguard at local pools, beaches, or even your school.

15. Coaching Local Youth Sports

If you were a competitive athlete or just love fitness, you may be able to make money as a youth sports coach. You’ll make the most as a private coach or by starting your own business. This way you can set your price and schedule, but it will be a lot of work in the beginning. 

  • Pay: You can set your own price, but most coaches earn around $14 an hour.
  • Get started: Start with coach training, then reach out to local organizations and meet other coaches in your area for opportunities and recommendations.

16. Lawn and Garden Care

Have a green thumb? You could earn some extra money in the summer months by going old-school and offering to mow lawns and tend to gardens. 

  • Pay: Landscapers earn around $14 on average with the opportunity to earn up to $20 an hour.
  • Get started: If you have your own equipment, advertise to your neighbors through Nextdoor and Facebook groups. Or you can work part-time for an established company.

 
Redbubble, or sell independently at markets and on social media. 

19. Farm for Cash

If you have the space and a green thumb, then consider selling food for cash. Garden vegetables and herbs can sell well on their own, or you can use them to make homemade sauces and salsas. Other products like eggs, honey, and flowers are also popular farmers market staples you can produce at home. Plus, your side hustle can double as a biology lesson.

  • Pay: Your product affects your price, but startup costs for selling at the market and purchasing basic booth needs are under $500.
  • Get started: Once you choose a product, plant it and get your business plan and certifications nailed down while they grow!

20. Begin Blogging

Blogging is a form of infopreneurship where you share your knowledge, build a professional reputation, and earn money. As a teacher, you can sell your lessons and resources, or write an e-book on effective classroom management. If you want a break from the classroom, share your experiences with gardening, business, or family instead. Once you build an audience, you can earn money through advertising or by selling your expertise as a speaker or writer. 

  • Pay: Bloggers earn an average $33,428 a year, but many make closer to $20,000.
  • Get started: Plan your blog topics and study up on how to market your blog, then get started writing. WordPress is a go-to for websites, but you can start out on simpler systems like Wix. 

21. Sell Stock Photos

If you dabble in photography, consider posting your photos on stock photo sites. You can make quite a bit from high-quality and desirable photos, but it’s becoming highly competitive. If you’re new to photography, then you may not make a lot, but if you’re already shooting then you might as well try to earn some money as you learn the basics. 

  • Pay: Stock photography can range from $.10–$80 a photo, and some sites charge you to post on them.
  • Get started: Start taking pictures that aren’t just pretty, but offer a story and context to them. Read up on royalties, then post your photos on sites like Alamy and Shutterstock. 

Many teachers and educators see side hustles or part-time work as a necessity to supplement their income. On the bright side, there are so many options these days that teachers can choose what works best for their schedule or lifestyle. Once you have a side hustle plan, set some savings goals and learn to budget your extra cash appropriately to get you there. 

Sources: Fortunly | Earnest | NEA | Statista 

The post 21 Side Hustles for Teachers In and Out of the Classroom appeared first on MintLife Blog.

Source: mint.intuit.com

MBS RECAP: Things Are Getting Ugly For Bonds

by Posted in Money Basics, Money Etiquette Tagged , , , , , ,

Posted To: MBS Commentary

Selling Spree Continues; MBS Underperforming Earlier in the day, Treasuries looked to be selling off at a slower pace versus the past few trading sessions. After sharp spikes in yields, this is the kind of pattern we tend to see before bonds find some support and undergo a friendly correction. But just after the 9:30am NYSE open, Treasury yields hit more new long-term highs, thus re-setting our vigilant search for support. To make matters worse, MBS underperformed (i.e. they had an even worse day than Treasuries) with both UMBS 1.5 and 2.0 coupons losing nearly 3/8ths of a point by the close. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Market Movement Recap 08:34 AM Treasuries were slightly stronger during the first part of the overnight session. After…(read more)

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Source: mortgagenewsdaily.com

401k Early Withdrawal: What to Know Before You Cash Out

by Posted in Home Design, Retirement Tagged , , , , , , , , , , , , , , , , , , ,

When it comes to making a 401k early withdrawal, there are a number of reasons why it might be tempting. With millions still unemployed due to the pandemic, unexpected expenses are taking a particularly hard toll. One reason why early withdrawal isn’t uncommon in the U.S. might be because it’s easy to assume you’ll have time to rebuild your 401k nest egg.

However, is the benefit of withdrawing your retirement savings early truly worth the cost? For many people, their 401k is their primary method of investing in their financial future. Before making a decision about early withdrawal, it’s important to consider the penalties and fees that could impact you. Read on to learn exactly what happens when you decide to dip into your 401k so you won’t be surprised by the repercussions.

How Much Are You Penalized for a 401k Early Withdrawal?

On the surface, withdrawing funds from your 401k might not seem like a bad option under extenuating circumstances, but you could face penalties. Young adults are especially prone to early withdrawals because they figure they have plenty of time to replace lost funds.

 

401k early withdrawal penalties

 

If you’re not experiencing a significant hardship, 401k early withdrawal probably isn’t the right choice for you. Ultimately, you could lose a substantial portion of your retirement savings if you choose to withdraw your 401k early to use the money to make other risky financial moves. Below, let’s delve further into the penalties that usually apply when you withdraw early.

1) Your Taxes Are Withheld

When you prematurely withdraw from your retirement account, your first consideration should be that you’ll have to pay normal income taxes on that money first. This means you’re losing at least roughly 30 percent of your savings to federal and state taxes before additional penalties.

Even if you only have $10,000 you want to withdraw, consider that you’re automatically giving $3,000 of your cash to the government. In the best case scenario, you might receive some money back in the form of a tax refund if your withholding exceeds your actual tax liability.

2) You Are Penalized by the IRS

If you withdraw money from your 401k before you’re 59 ½ , the IRS penalizes you with an extra 10 percent on those funds when you file your tax return. If we use the example above, an additional $1,000 would be taken by the government from your $10,000 — leaving you with just $6,000. If you’re 55 or older, you could try to get this penalty lifted by the IRS through the Rule of 55, which is designed for people retiring early.

Also, there are exceptions under the CARES Act, which is designed to help people affected by the pandemic. There are provisions under the act that state individuals under the age of 59 ½ can take up to $100,000 in Coronavirus-related early distributions from their retirement plans without facing the 10 percent early withdrawal penalty under certain conditions.

3) You Lose Thousands in Potential Growth

Even if you’re not deterred by tax penalties, think twice before you sabotage your long-term retirement savings goals. When you withdraw money early, you’ll miss out on potential future savings growth because you won’t gain the perks of compound interest. Compounding is the snowball effect resulting from your savings generating more earnings — not only on your principal investment but also on your accrued interest.

Also, if you make a 401k early withdrawal while the market is down, you’re doing yourself a disservice because you’ll be leaving thousands on the table. It’s unlikely you’ll fully recover the lost years of compound interest you would have benefited from. You might need to get creative with a passive income stream to help support you later in life.

 

tips to minimize 401k withdrawal penalties

 

When Does a 401k Early Withdrawal Make Sense?

In certain cases, it actually might be strategic to move forward with 401k early withdrawal. For example, it could be smart to cash out some of your 401k to pay off a loan with a high-interest rate, like 18–20 percent. You might be better off using alternative methods to pay off debt such as acquiring a 401k loan rather than actually withdrawing the money.

Always weigh the cost of interest against tax penalties before making your decision. Some 401k plans do allow for penalty-free early withdrawals due to a layoff, major medical expenses, home-related costs, college tuition, and more. Regardless of your strategy to withdraw with the least penalties, your retirement savings are still taking a significant hit.

401k Early Withdrawal, Hardship, or Loan: What’s the Difference?

Knowing the differences between a 401k early withdrawal, a hardship withdrawal, and a 401k loan is crucial. Due to the many obstacles to make a 401k early withdrawal, you may find you want to keep it untouched. If you’re convinced you still need to use your 401k for financial assistance, consult with a trusted financial advisor to figure out the best option.

When Does This Apply?

Taxes and
Penalties

Early Withdrawal

 Your funds are withdrawn to pay off large debts or finance large projects. Your 401k fund is typically subject to taxes and penalties.

Hardship Withdrawal

 You’re only eligible for this type of withdrawal under circumstances such as a pandemic or natural disasters. Withdrawals can’t exceed the amount of the need and the funds are still subject to taxes and penalties.

401k Loan

 The loan must be paid back to the borrower’s retirement account under the plan. The money isn’t taxed if the loan meets the rules and the repayment schedule is followed.

Additional Considerations

If you’ve left a job and don’t know what to do with your Roth IRA, a 401k transfer is a good option. Most likely, you will save money and have a wider range of investment options when you transfer your funds. 401k fees can be high, and rolling over your funds to a Roth IRA account could be wise in the long run. Also, be aware that the process is more complicated for indirect rollovers. 

In Summary:

  • If you’re one of the millions of Americans who rely on workplace retirement savings, early 401k withdrawal may jeopardize your future financial stability.
  • There are very few instances when cashing out a portion of your 401k is a smart move.
  • In most cases, any kind of early 401k withdrawal is detrimental to your retirement plans.
  • Stick to your budget and bulk up your emergency fund to stay one step ahead.

In short, 401k early withdrawals are usually counterproductive. Prevent compromising your hard-earned savings by using a free budgeting tool that will set you up for success. After all, being prepared and informed are two of the most important parts of maintaining financial health.

Source: SEC

The post 401k Early Withdrawal: What to Know Before You Cash Out appeared first on MintLife Blog.

Source: mint.intuit.com