Financial Focus
What should you do with
401(k) after a layoff?
As you’re no doubt aware, the • Keep the money in your former your former employer or moving it
long and deep recession has resulted employer’s plan. If your former em- to an IRA, neither choice helps you
in the highest unemployment rate ployer permits it, you may able to answer the question of how you’ll
in decades. But if you’ve been laid leave your money in your 401(k). make it, financially speaking, until
off, or if you fear a layoff may soon You won’t have to pay any immedi- you’re working again. If you’ve built
be coming, you’re less interested in ate taxes, and your money can con- up a cash cushion in the preced-
statistics than in your immediate fi- tinue to grow tax deferred. But you ing years, you can turn to it now,
nancial future. How will you get by may no longer be able to add funds of course. And if you’ve created an
until you land a new job? to your account. investment portfolio outside your
This is a scary question, of course. • Roll your money over to an IRA. 401(k), take a close look at it. You
And it can cause you to look at all If you roll over your 401(k) assets can consider adjusting your invest-
your available financial resources to an IRA, you’ll avoid paying im- ment mix to add more income-pro-
— including your 401(k), which mediate taxes, and your money can ducing investments, if appropriate.
may well be the largest single finan- continue to grow tax deferred. Fur- Keep in mind that your portfolio
cial resource you have. thermore, you can fund your IRA should reflect your risk tolerance,
But before you cash out your with many types of investments, as long-term goals and time horizon.
401(k), make sure you understand opposed to a 401(k), which may of- A layoff is never easy — and it
what’s involved. Your former em- fer only a handful of choices. And can force you to make some tough
ployer is required to withhold 20% when you can afford it, you can choices. But if you can help protect
Fresh & Delicious Cakes, Pies & Cookies
of your account balance to prepay make additional contributions to your 401(k) today, you’ll be helping
federal taxes. Also, all your 401(k) your IRA. Also, when you retire, yourself tomorrow.
proceeds will be taxed as ordi- you may find that an IRA gives you
nary income. And if you’re under more flexibility in making with- This article was written by Ed-
age 59½ when you liquidate your drawals than a 401(k). ward Jones for use by Bill Bough-
401(k), you may also be subject to While there are some clear ben- ton, Weaverville’s local Edward
a 10 percent penalty. And worst of efits to keeping your 401(k) with Jones Financial Advisor.
all, the money may not be available
to you when you retire.
Order Early for
Obviously, if you have no other
Dance at Twist Again Dance Barn
financial resources, you may have
the Holidays!
no choice but to tap into your
The Twist Again Dance Barn in Mars Hill will host events every
401(k) plan. However, if you can
Saturday night in the month of November. Live music begins at 7 pm
Freshly Baked
find an alternative way to tide your-
and runs until 11 pm. Admission is $6 and there are cake walks, 50/50
• Decorated Cakes
Thanksgiving Special!
self over until you’re working again,
tickets and food and refreshments available. Everyone is welcome and
• Pumpkin Pie
Yummy cake looks exactly like
you may be better off in the long
no alcohol is permitted. AM Gold will be providing 1970s rock-n-roll
• Dairy-Free Pumpkin Pies
run by not cashing in your plan.
on Saturday (Nov. 14). From Weaverville, travel to Mars Hill and take
a perfectly roasted turkey
NEW!
• Dairy-Free Cupcakes
with dressing!
If you decide against the “cash-
Exit 11 off the future Interstate 26. Take a left at the top of the ramp
out” option, what can you do with
and travel five miles before taking a right onto Halewood Road. Fol-
your 401(k)? Here are two possibili-
146 eaW verville Hwy.
low signs on Halewood Road to the barn. For more information, call
(828) 645-2038
ties:
Leroy at 828-380-9429.
Tues-Fri 9-6, Sat 10-2
www.BakeShoppeAsheville.com
Ask about A family-owned
our national
business since
warranty
1987
From Tire Rotation to Major Repairs
Come by and meet our helpful,
friendly staff.
(828) 658-3030
Experience • Dependability • Reliability
277 Weaverville Hwy. • Asheville, NC 28804
8 THE TRIBUNE - November 12 - November 18, 2009
www.weavervilletribune.com
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