QUOTE OF THE MONTH
An investment in knowledge pays the best dividends.
NEED CASH? AVOID TAPPING YOUR RETIREMENT ACCOUNT
Imagine if your 35-year-old self magically appeared in front of you one day and asked for a percentage of your retirement savings or a bit of your retirement income. While this would never happen, something financially analogous happens in the lives of too many people. They withdraw assets from their retirement accounts in mid-life, which can hurt their lifetime retirement savings potential (and possibly, their retirement income potential as well). In effect, they borrow from their future selves when they take retirement plan distributions too early.
Most people who turn to retirement savings for cash do so in response to a pressing financial need, perhaps not fully realizing the negative effect the draw down could have on tax-advantaged compounding. Loans can be another negative. Is it possible to borrow up to 50% of the invested assets in some retirement accounts, and even more under certain hardship circumstances declared by the federal government in response to a disaster or emergency? Usually, retirement plan loans do not trigger the penalties and taxes common to early retirement plan distributions, but they handicap your potential to amass retirement savings in the same way, by taking money out of a vehicle where it might grow and compound minus annual taxation. Fail to pay such a loan back to the plan on time, though, and you might face a 10% early withdrawal penalty and taxes on the amount not repaid soon enough.1
DID YOU KNOW?
The Ed Sullivan Show didn’t introduce Americans to the Beatles
The Beatles were actually seen on U.S. television months before that iconic February 9, 1964 performance. In November 1963, both The Huntley Brinkley Report (NBC) and the CBS Morning News aired stories 4-5 minutes long on the band, and Beatlemania in the United Kingdom.4
ON THE BRIGHT SIDE
Certain Medicare Part D plans (and certain Part C plans with prescription drug coverage) are participating in the Part D Senior Savings Model, which caps monthly insulin copays at $35 in the 2021 plan year. As an effect of this, the Centers for Medicare and Medicaid Services (CMS) says that Medicare beneficiaries within these plans could see average out-of-pocket savings of $446 on insulin this year.5
1 2 3 4 5 6 7 8 9 = 100
Can you write out a math problem where the single digits 1 through 9 all stay in numerical order (as above), where the solution is 100?
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1 – Forbes, February 8, 2021
2 – PrecisionProGolf.com, February 16, 2021
3 – Business Traveler, February 5, 2021
4 – Mental Floss, February 9, 2021
5 – Centers for Medicare & Medicaid Services, May 26, 2020