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Retirement eNews

— Winter 2009

From the Union Plus Retirement Planning Center

Holding the Line in Difficult Times :


1. Expert answers to tough credit questions
2. Unlocking the retirement savings vault
3. The secret of fixing your finances: STING
4. “Required minimum distributions” not required in 2009
5. Tips for digging out of debt
6. Take steps to manage your financial stress


1) EXPERT ANSWERS TO TOUGH CREDIT QUESTIONS

Can't increase your retirement savings because of hefty debt payments? You're not alone. To help more union members manage their credit wisely, consumer credit expert Gerri Detweiler will conduct a "Webinar" on February 19 for Union Plus.

In her "Smart Credit Strategies" presentation, Gerri will discuss easy ways to save money on your credit cards, tips to boost your credit score, how to get out of debt on a tight budget, and other questions submitted by participants.

To participate in this Webinar, sign up online.
https://www2.gotomeeting.com/register/703939954


2) UNLOCKING THE RETIREMENT SAVINGS VAULT

If you’re having trouble keeping up with the bills, the money you’ve stashed away in a retirement account can look mighty tempting. Does it make sense to withdraw some of those savings?

Unfortunately, income tax will be due on any tax-deferred funds you take out, plus a 10% penalty if you’re under the age of 59½. (Withdrawals for medical expenses, a first home purchase, or a few other purposes may avoid the penalty.)

In the 15% tax bracket, taking $20,000 out of a 401(k) or Traditional IRA will typically cost $5,000 in tax and penalties. What’s more, the savings you take out won’t be there to grow when the market recovers.

But what if you need the money to save your home, feed your family, or pay for necessary medical care? Our suggestion: before making a move, talk to a reputable financial adviser. There may be a better alternative. If so, an adviser’s fee could cost much less than the penalty you’d pay Uncle Sam.

http://www.unionplusretirement.org/getting-help/financial-advisor.cfm


3) THE SECRET OF FIXING YOUR FINANCES: “STING”

No, we don’t mean the world-famous singer or the classic Paul Newman film. STING is an easy way to make your money work harder for you – and it’s perfect for folks who tend to procrastinate about addressing financial concerns. Here are its five steps, as developed by Rita Emmett, author of The Procrastinator’s Handbook:

1. Select just one task you’ve been putting off.
2. Time yourself. Give the task one full hour, using a kitchen timer.
3. Ignore everything else. Focus on doing just this one task.
4. No breaks allowed while the timer is ticking.
5. Give yourself a reward when the job is done.

Sounds simple, doesn’t it? You can use the STING method to start whittling down credit card debt, reduce your food costs, eliminate late and overdraft fees, avoid panic at tax time, and more.

Find out how in "Price of Procrastination," a new article by consumer credit advocate Gerri Detweiler.

http://www.unionplus.org/money-credit/procrastination


4) “REQUIRED MINIMUM DISTRIBUTIONS” NOT REQUIRED IN 2009

There’s some good news for older Americans whose retirement savings accounts have been hit hard by the market meltdown: a new tax rule lets you waive the required minimum distribution (RMD) in 2009 from a Traditional IRA, Inherited IRA, 401(k), 403(b), or certain other retirement plans.

If you don’t need the money, suspending the distribution could help your retirement fund get back on its feet faster. To skip the RMD this year, contact your plan administrator. (Note: you can’t waive the RMD for 2008, even if you take it in 2009.) For details, see the summary at IRS.gov.

http://www.irs.gov/retirement/article/0,,id=96989,00.html


5) TIPS FOR DIGGING OUT OF DEBT

Does it seem you’ll never be able to get out from under your debt – especially those expensive credit card balances? The experts at Union Plus Credit Counseling have posted a 10-step guide online to help you get your finances on a firmer footing.

http://www.uniondebthelp.org/digging-out-of-debt.cfm

The most important step is to get help if you need it. The Union Plus Credit Counseling Service is available to assist you. And check out the Union SAFE grants for union members impacted by disability, lay-offs, strike, or job loss.

http://www.unionplus.org/life-planning-services-legal/member-assistance-programs/union-safe-grants-money-hardship-program


6) TAKE STEPS TO MANAGE YOUR FINANCIAL STRESS

Tumbling markets, imploding banks, foreclosures, layoffs, shrinking CD rates  -- what next? Like many other Americans, you’re probably feeling bewildered, uncertain, and stressed out.

Don’t let financial stress affect your health.  Check out these “Tips for coping with stress” from the Mayo Clinic.

http://www.mayoclinic.com/health/coping-with-stress/SR00030

And if you’re worried that you should be doing something with your money but don’t know what, a financial adviser can help you review your choices. (Look for one who isn’t paid for getting you to change your investments.)

http://www.unionplusretirement.org/getting-help/financial-advisor.cfm 

Copyright (C) 2009 Union Privilege. All rights reserved.
Union Privilege, 1125 15th St., N.W., Suite 300, Washington, DC 20005

 

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