Some people have thrown the idea around of making a membership site only to get the point of thinking
It is so complicated, I need expensive, hard to install software
And you know what, I have seen some membership sites who spent a lot of money creating the actual site, but often miss the point. That isn’t to say you should not put effort into the site itself. In simple terms,
You can keep it simple with a sales page and autoresponder, or you can be more creative and complex with sophisticated software scripts. This all comes down to what you can do!
The Rhodes Brothers have failed at this! Several times in fact! But guess what, they didn’t give up!
John and Matt have fought their way through many wrongs to find the rights! On top of this, they have just conducted a 12,000 person survey all focused on membership sites and the issues people face with them! Imagine the resources you need to get that kind of information?
First of all, I really do not like spam! It is annoying, time consuming and often, harmful to your computer software.
Spam is often poorly written, contain grammatical errors and typos. This is usually due to the fact it was more than likely translated to english from another language using an online translation tool, which really only translates words within the sentence as opposed to the sentence itself and makes for a good laugh.
One spam email I received however was not translated, it was one short sentence that tickled me…
Did your employer offer you early retirement? Are you changing jobs? If so, you may wonder about your 401k. In the event of a job switch, you can rollover your 401k to your employer’s new plan, pay fees to keep it the same, rollover the account into an IRA, or accept a cash out. In terms of early retirement, if you don’t have the needed financial resources to makeup for the extra years of retirement, a 401k cash out is one of your few options, aside from getting another job.
A new job and early retirement are just a couple instances in which an individual may ask for an early 401k withdrawal. At the time, it seems like a good idea. After all, who is going to turn money away? Not many. With that said, it is important to look at the big picture. When taking an early withdrawal from your 401k, it is not as simple as taking money from your bank account. You are hit with many rough patches and consequences. What are they?
Taxes and fees. 401k plans are designed for retirement. For that reason, you should wait until you are at least 59 ½ years old to collect your savings. Even in the event of early retirement, you are required to pay a fee. That is a 10% fee. Next, there is the tax factor. Your employee contributions throughout the years were tax sheltered. You did not pay tax on that income. Yes, you have known all along that you will pay taxes on this money, but are you ready to pay them now? You must be if you intend to take an early withdrawal. Depending on the size of your 401k, this can be a lot of money. Add that in with your 10% early withdrawal fee and you may not have much left.
As previously stated, it depends on the situation. If just switching jobs and in your early 20s or 30s, consider the alternatives. These include paying management fees to keep your 401k plan with your former employer, rolling over to your new employer’s program, and rolling over to an IRA. For most, even the maintenance fees are less than the early withdrawal penalty. As for early retirement, what are your options? If you did not intend to retire for 10 more years, try to find another job or offer to take a pay cut. You are still provided with employment, can continue to contribute to your 401k, and earn livable income until you are prepared to retire. If you prepared to retire in 2 or 3 years, look at your savings. Is there enough to get you buy until you get access your 401k without the penalties?
Finally, it is important to look at the total this will cost you. If you are in your late 20s and switching jobs, you may have only acquired $10,000 or so in your 401k. You are young in life and would like to purchase a new car or a new home. You think this money could come in handy and it probably would, but how much of that money are you going to see? Continue reading on for an example, using the above mentioned $10,000.
As previously stated, there is a 10% early withdrawal fee. Right there is $1,000. Then, the income is taxable. You can use the internet or call the Internal Revenue Service (IRS). Find out what your tax rate is. On average, most Americans pay around 20%. You can expect this to be about $2,000. Not only do you need to pay federal taxes on this income, but state taxes too. Determine your state income tax. They vary greatly. Even if it is only 5%, that is $500.
By using the above mentioned formula, you are left with $6,950. You paid $3,500 in penalties and taxes. Yes, this is still money that you could use, but imagine if you let it sit in your 401k and continue to collect money. With retirement savings, it is important to think long-term, even if you are only 20 years old.
The only individuals who should consider an early withdrawal are those considering early retirement, but there are still risks. If 25 and switching jobs, don’t cash out. Wait until you are settled in your new job and apply for a 401k loan. You are doubled taxed, but not charged large fees.
This is just a small portion of what you can read about here.
What you never knew about retirement accounts and why it could cost you a fortune! more…
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