401(k)’s Record Hardship Withdrawals At 10 Year High

Post by BecomingYourOwnBank.com Owner – Dan Thompson

NEW YORK (CNNMoney.com) — Withdrawals from 401(k) retirement saving plans saw their biggest spike in over ten years, Fidelity Investments said on Friday, in the latest sign of a dismal economy.

Fidelity reported that 62,000 Fidelity participants made hardship withdrawals from their 401(k) workplace plans during the second quarter. That’s up from 45,000 participants during the prior quarter, a 37% increase. That means that 2.2% of Fidelity customers took a hardship withdrawal in the second quarter……

Unbeknownst to the majority of 401(k) owners, they could have created a banking system that would have allowed them to withdraw funds, determine their own payback schedule, and not have to worry about the potential tax consequences if the person were to lose their job, were unable to pay the loan back, or switched jobs and could not “roll” that loan to his/her new employer. Remember if you take a loan from a 401(k) and don’t pay it back or lose your job, you now have a tax liability and potentially a penalty if you are under 59 ½ years old.

There is a 401(k) alternative, creating your own banking system, to access funds, determine your own payback schedule, and if you have to change jobs or lose your job it won’t have a tax affect on the loan. Keep in mind that even within our own banking systems we want and need to pay back the loans, but they can be paid on our terms…..not theirs.

Better yet, within your own banking system you are paying YOURSELF back, which can be a substantial difference over time in creating wealth.

To learn more go to: www.becomingyourownbank.com