Age % of Total Savings 20s 25% 30s 20% 40s 22% 50s 11% 60s 9%

As you can note from above, as the person gets older, he has more retirement savings and tends to borrow less from his/her 401k plan. However, people in their 40s borrow about 2% more than people in their 30s, anyone have a logical explanation for this? Post your comments below if you do! And while it is good that as the person gets older, he tends to borrow less, it is not advisable to borrow from your 401k at all! We will go over 8 major reasons why you should never borrow from your 401k.

Some financial advisors might tell you that borrowing from your 401k is better than using your credit cards or taking out a commercial loan with higher interest rates. They also say that when you repay your 401k loans, you will be repaying interest to yourself, and not some bank. While this is partially true, in the long term, you would be way better off accumulating your savings and gaining compound interest, rather than reducing your principal amount by borrowing money from it.

1) Your Savings Growth is Reduced

If you take out a 401k loan, most plans have a provision that you cannot make any more contributions until a certain percentage of the loan is paid back. Some plans may even have a provision that states that 100% of the loan amount must be repaid! Added to that, even if your plan does not have a repayment provision, you may not be able to afford to keep up with your 401k loan payments and make additional 401k contributions (that you were supposed to make every month anyways). This significantly reduces your ability to grow your 401k savings. The whole point of 401k plans is to save for your retirement, by withdrawing any amount of money from it, you are really defeating the purpose of the plan!

2) You Are Losing Money

Every monthly contribution that you miss also misses the growth & appreciation that is available from the stock markets, bond markets as well as commodities futures markets. Furthermore, you are also missing the power of compounding interest on your total principal balance. The low interest payments that you are paying to yourself is likely to be insignificant compared to the appreciation & returns on investment that is available in stocks/bonds/commodities markets. Also, the money you are paying yourself will be after-tax. For every $1 you earn, your ability to repay the loan will only be $0.78 (considering you are in the 22% tax bracket). Also, that $0.78 that you have to repay yourself will be taxed AGAIN when you retire and withdraw your money from your 401k. You are pretty much getting beat down by the double taxation & losing the power of compounding interest, you do not want that!

3) Time is Not In your Favor

By making monthly contributions to your 401k, the idea is that over the long term, your money will grow substantially and accumulate the power of compounding interest. Compounding interest calculators state that your money will double every 8 years if you invest diligently and with discipline. Most 401k plans allow loans to be held for up to 5 years. If you used a 401k loan to purchase your home (or finance for a down payment on the home), you are losing the ability to double your money in 8 years average. What’s more, you will lose the power of making additional contributions & more growth opportunities & returns on investment. Over time, your 401k balance will never reach its maximum potential and the greatest sum of money you could have had!

4) Unable to Repay the Loan? More Trouble!

If you get yourself in a situation where you cannot repay the loan, it will be considered a taxable withdrawal and you will be subject to income taxes. This is in addition to the 10% early withdrawal penalty you will have to pay for your withdrawal.

5) Quit Your Job? Repay the Loan!

If you quit your job with your current employer, the 401k plan administered by your employer will require you to repay it immediately! Thus if you have a 401k loan, you will be stuck at your current job for as long as you do not repay the loan. This is because if you quit, you will have to come up with the cash to repay the loan. If you do not have that cash, you cannot quit your job. This might require you to pass up a better opportunity where there’s more pay, challenge and career enhancement.

6) No Financial Cushion

You should borrow a 401k loan in the toughest of circumstances where you really have NO other source of funding, no family, no relatives, etc. If you borrow a 401k loan to pay off your credit card debt or to fund an exotic vacation, this money will NOT be there when you really need it in the toughest of circumstances. That is why we say, do not borrow from your 401k!

7) Living Beyond Your Means?

If you need to borrow from your 401k, this automatically creates a red flag that you are living beyond your means. If you cannot find any other way of making money other than borrowing from your 401k, you should revisit your spending habits and see where you are blowing up excess money.

Violates the King Rule of Personal Finance

Borrowing from your 401k violates the very important saying of “Pay yourself first.” It is definitely a bad idea to violate this rule.

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IRA Mistake #1: Not Naming a Beneficiary

Upon opening an IRA, you are not required to name anyone as a beneficiary to the account. Even though this action is not required, it is highly recommended. If something happens to you and there is no beneficiary named for the account, it will end up in probate. This will be a long, drawn out process that will cost money that didn’t need to be spent. The money in the account will be disbursed over the remaining life expectancy of the deceased account holder. This is usually a shorter amount of time than the expectancy of a beneficiary. In short, this means that money will be disbursed faster which will place a very heavy tax burden on the person who is receiving the money, which is determined in probate.

Naming a beneficiary when you open the IRA account will eliminate this. You will then be absolutely sure where your remaining IRA account will go after your death. You can also determine how fast the funds will be distributed.

IRA Mistake #2: Forgetting the Deadline for IRA and Roth IRA Contributions

Don’t forget the core purpose of Roth IRA’s – to fund it as much as possible for retirement! Many people believe that the last day they can make a contribution is on December 31, of the last day of the year. This is not true! You may continue to contribute up to April 15 of the following year. IRA contributions are based on the tax year – not the calendar year, so don’t miss this extra time by assuming the end of the year means the end of contributions.

The best way to avoid this common mistake is to fund as much as you can early in the year. If you meet the maximum simple IRA contribution limit or Roth IRA contribution limit, you will not miss out on saving more money. The date of April 15 is referred to as an extended contribution deadline. These few extra months could make a huge difference for most savers in your IRA retirement account.

IRA Mistake #3: Not Knowing Spousal/Non-Spousal Inheritance Rules

There is a difference in the rules of inheritance that applies to spousal and non-spousal beneficiaries. If you are a spousal beneficiary, you have two options. You may roll the funds into an IRA that is already in your name, or you may change the name on the inherited account. After this is complete, the money will be viewed as if it were yours all along. Contribution and withdrawal rules will apply as if it were your own account.

Non-spousal inheritances work differently. You will not be able to roll the funds over to your personal IRA. You are also not allowed to make any contributions to the original IRA account.

IRA Mistake #4: Not Contributing Because of Stock Market Volatility

Due to the recent stock market meltdown, many people are questioning whether they should continue contributing to their IRAs. The answer is simple. Never stop contributing! Regardless of what the market is doing at any given time, you should take full advantage of the numerous benefits offered by an IRA retirement account. One of those benefits is a tax break. No matter what the state of the market is, you will continue to get tax breaks on all money contributed. If you are lucky enough to work for a company that will match your contribution, you make even more money with the account, as well as with the added tax breaks which will of course lead to IRA retirement income when it is time to spend it.

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Building a mlm business part-time is the greatest gift you can give to yourself when you retired. Retirement should be a time when you can relax and forget about work completely. Unfortunately, many people are unable to retire comfortably due to the lack of proper financial planning.

When retirement hit them, many find themselves in an awkward position as they do not have enough savings and their insurance are not adequate to cover their lifestyle that they want. Investing in stocks and property may or may not earned them the income that they need for retirement as it really depends on the market condition when you retired.

You could try your luck on buying lottery or on the gambling table but you should know that the odds are against you. That is how the lottery and gambling business operate and make money by engaging mathematical expert to design games that the probability are in favour of them.

What you should be seeking are money making opportunities that the probability are in your favour. One business you should consider and think about is building an online mlm business. First, remember that an online mlm business is not a get rich quick scam. It require mental hard work in the beginning as you need first to educate yourself on how stuff work on the internet.

You have to learn and gain knowledge in area such as:

– Creating and updating website.

– Optimizing your website with relevant keywords for free web traffics.

– Bid for targeted keywords using Google Adwords (http://adwords.google.com).

– Article marketing to drive free traffics to your business.

– Submit online press release etc.

That is why in any kind of offline or online business, it take both time and effort. However, the great thing about building an online mlm business is its leverage income. Leverage income means that you earn a lifetime commissions by grooming team leaders that were recruited by you. You guide and teach them to duplicate your success.

In the long-run, an online mlm business opportunity beats any other online opportunities due to its lifetime leverage income. Leverage income take into consideration that all human have a limited amount of time and money. Alone, we have limited amount of advertising budget. Alone, we can only managed a limited number of high traffics business website.

As humans, we need to sleep, rest and spend time with our family. Our time to run our business is also limited. There are no way a person can earn a five to six figure of consistent online income without any kind of team effort in the long-term.

Planning to make more money and living a comfortable life after retirement is definitely possible. Building a successful business is a slow process, however, the knowledge gain will become part of you. That is the real secret of wealth of the rich and wealthy.

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Well some people have discovered out how to make the dream a reality and retire in style by living and investing in the heavenly paradise of Costa Rica! It all begins with the real estate market. Those who know say the real estate market in Costa Rica is one of the most stable in the world, and prices are easily comparable to US property or lower. You could easily find a beautiful beach house for $300,000 overlooking the ocean. Or buy a piece of land near the beach for $100,000 and build your dream home. Imagine spend your days walking on the beach, a drink on the terrace, watching the sunset, and socializing with new friends who share your enthusiasm for a good retirement!

You may think it sounds crazy, that people only go to Costa Rica on vacation, but that’s no longer true. More and more foreigners are retiring in Costa Rica, especially Americans but also Europeans and other foreigners. And they are all doing it the same way: investing in property which will only go up in value for years to come, while living their retirement in the sunshine. But how? you ask. The following are just a few examples of the things that make it so easy to live the dream and retire in Costa Rica:

ONLY 2 HOURS AWAY

Costa Rica is only 2 hours away from Florida and all the comforts of home. Take a log weekend in Miami and do some shopping, or grab a connector flight to visit your family, and have them come visit often! And be careful who you invite to come visit you, it is so easy to get to Costa Rica that they will certainly come!

ESPANGLISH

Maybe not everyone speaks English, but no matter where you are, there is probably someone around who will be able to translate. A large majority of the population can speak at least some English, and most of the private schools are English Immersion, so from a young age many of these kids are bilingual. And hey, why not take some Spanish lessons yourself? Stretch your brain a little and make some friends while you are at it.

COST OF LIVING

The cost of living is comparable to the US if not slightly lower. There are some items which are shockingly inexpensive, while others are what you are used to at home. Groceries, restaurants and shopping tend to be about what as you are used to, however workers such as a live in maid or gardener are much less expensive than in the US. During retirement, it can often be a great blessing to have people around to help you with the daily chores.

HEALTH CARE

Health Care in Costa Rica is known for its quality and inexpensive price tag. Many of the doctors are trained in the US or Europe, and hospitals are very modern with all the latest equipment and technologies. Not to gossip but Costa Rica is known for its movie star plastic surgery!

MEDICARE

Both the Costa Rican government and Medicare and are making it extremely easy for ex-patriots to receive their Medicare cheques in Costa Rica through a network of banks in now offering direct deposit to your Costa Rican bank account.

VISAS & LEGAL ISSUES

Do I need a visa, or how does it work? If you are 45 years or older you can apply to be part of a retirement program set up by the Costa Rican government to encourage foreigners to come to Costa Rica. Benefits include tax exemptions and incentives, but the greatest thing is that you don’t have to pay tax on your retirement income in Costa Rica!

CAN I OWN PROPETY IN COSTA RICA?

In Costa Rica foreigners are in no way penalized when purchasing property. Foreigners have the same rights as a Costa Rican and the law will treat them as an equal. You can also incorporate your own company and purchase the property through your company for additional tax breaks.

OF COURSE THE BEAUTY …

The words Cost Rica actually mean Rich Coast, a name Christopher Columbus bestowed on this country overflowing with natural beauty, lush rainforests, mountains, cloud forests, and sandy beaches. Costa Rica is world famous for its diverse natural habitat and beautiful sunsets.

So there you have it, not a bad list of reasons to rent out your house, cash in your paper assets, and retire to a beach house in Costa Rica! There may be a coming recession, but you don’t have to live in it, or let it spoil your long awaited liberation from the rat race.

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2. You don??\’t understand the difference between a trust and a will.

3. Family members challenge your parent??\’s will.

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5. The IRS selects you for an audit.

6. Your parents die and leave you executor of their estate.

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8. You have a retirement savings plan.

9. You change jobs.

10. You receive a speeding ticket.

11. You are buying or selling your home.

12. Your driver??\’s license is suspended.

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for your ex-spouse??\’s debts.

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74. You are cheated by a door-to-door salesman.

75. A repairman charges more than a given estimate.

76. A creditor tries illegal collection tactics.

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78. You are scheduled to appear in small claims court.

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of the trash dumpster.

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91. Your bank sends a foreclosure notice after

one house payment is late.

92. A retail store won??\’t accept the return of defective merchandise.

93. A repairman won??\’t stand behind his work.

94. A trespasser is caught poaching on your land.

95. You are leasing acreage.

96. You receive a letter from a creditor and it is not your debt.

97. A bank turns you into a credit bureau unjustly.

98. You need advice concerning a divorce.

99. You own your own small business.

100. You can??\’t make heads or tails out of the new tax forms.

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Our product is a Life Events Legal Plan???. This means the Pre-Paid Legal membership isn??\’t only a fix??? for sudden and unforeseen events. The plan is designed to provide the common legal services our members need throughout the course of their lives. In essence the Life Events??? nature of our legal plan actually encourages members to call their provider law firms when life happens and legal Counsel is essential. Members walk through events more confident and with less stress. The plan offers features to help when life gets more complicated as well. Ask your independent associate for a brochure that illustrates the benefits available in your state or province.

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It is powerful wealth building tool. When I heard about this from Roccy DeFrancesco, I was completely overwhelmed because I spent my lifetime looking for tax-advantaged products that are safe, legal, that you can use, with very little risk. You are not going to get this from your lawyer or your accountant. Your lawyer’s stock-in-trade answer is “possibly, maybe or I’ll look into it.” And even if he knows he’s not going to tell you because, traditionally, he works on both sides of the fence.

Your accountant and lawyer would typically not look to at any type of these products because he could become an IRS target. Whenever there is a criminal investigation, his papers would be the first thing they go after, summonses. I work with accountants and I teach them and this is their usual stance on the matter. I teach lawyers and accountants for credits. They’re generally intimidated. For the price of preparing your income tax return, they’re not going to look at these types of wealth-building tools. The wealth-building strategies of a Roth IRA on Roids are completely legal. You do not have to hide your money. You do not have to go offshore. You do not have to provide a lot of documentation, and you do not have to report your requirements to the feds.

With a Roth IRA on Roids the following basic information would be required: your age; how much money you wish to deposit into your account; when you wish to withdraw from the account. Based on this information, a specific financial chart can be drawn for you.

To summarize the main benefits of your Roth IRA on Roids: your money never goes backwards; you’ll be able to take your money out tax free; there is a guaranteed return. So let’s discuss how you can fund your account using other people’s money.

Roccy DeFrancesco’s wrote a book, “Home Equity Management.” The book is very well written. Roccy is a very meticulous guy and I have a lot of respect for him. The book describes how you can reposition your home equity. Let us look at your home equity for a moment. If you are in your home with a 95% mortgage, does your mortgage diminish the value’s home? The answer is, “No.” If your home is fully mortgaged it would not diminish the value. But, if you live in an area like California, with mud slides, or Florida with hurricanes and tornadoes and you own 100% of your home (i.e. not mortgaged) then whose problem would it be if your house slides down the hill or it goes under water? It would be your problem. On the other hand, if it’s heavily mortgaged, then it would not be your problem. It would be an insurance problem and it would be a mortgage company problem.

So what is the relation of your home equity with your Roth IRA on Roids? If you leverage your home equity and reposition it to fund your Roth IRA on Roids then, effectively, your money is sitting in your Roth IRA on Roids account and in investment opportunities and it’s safe. Real estate is the only leverageable asset class. Everybody understands that you buy real estate with 5% down, 10% down, depending on how well financed you are. It’s the only leverage that is recommended, people accept, people understand, the banks do it. So by repositioning your home equity in order for you to fund the Roth IRA on Roids, financially you are using other people’s money. And this could also be accomplished with commercial real estate. If you have equity in commercial real estate, refinancing it in order for you to reposition your assets definitely makes a lot of sense. At the end of the day, you still have the same assets. If you have equity in your home or commercial estate, that’s an asset. If you have equity in Roth on Roids, or other investment opportunities, together they are the same number. You’re just repositioning. You are relocating your assets. That’s all you’ve done.

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