Issue link: https://www.epageflip.net/i/406903
DearMary:I am thinking of taking a loan from my 40l(k) retire- ment account to pay off my credit- card debt. I can repay the loan with payments taken directly from each of my paychecks, without any penalties. The interest rate is not too bad, and a lot less than I am paying to my credit card com- panies now. This seems like a great idea to me, but I'm worried I might be missing something. — Sharon Dear Sharon: I would not recommend you take a loan from your retire- ment account to repay your credit-card debt for these three reasons: 1. Uncertainty. If you leave your job for any reason before the loan is repaid, the entire bal- ance becomes due and payable. That's the law. You'll have a couple of weeks to come up with that money. If you can- not, the balance ow- ing will be converted to a withdrawal. You will be hit with early-with- drawal penalties and you will owe both fed- eral and state taxes on the entire remaining bal- ance. The penalties are stiff because you're not supposed to have access to this money until you are at least age 59 . The penalties and taxes could easily add up to half of the amount you owe. Ouch! 2. Stunted growth. You lose the benefit of growth while those funds are being loaned out to you. The reason you are contributing at all is to allow money to grow steadily over a long period of time to support you during your non- earning years ahead. Taking money out brings that process to a screeching halt. 3. Double taxation. The benefit of a traditional 40l(k) account is that you get to contribute and in- vest pre-tax dollars. You get to defer taxes until you take it out in retire- ment. If you borrow now, you must repay the loan with after-tax dollars. Are you with me? If you borrow, say, $10,000, you will have to earn about $13,000 gross to end up with $10,000 af- ter-tax dollars to repay the loan. You don't get to repay with pre- tax dollars, so that's the first tax- ation. Then, when you retire, you will pay tax on the same $10,000 dollars — taxation No. 2. All money in traditional retirement accounts is taxed upon withdrawal regardless if the funds were borrowed and then paid back with after-tax dollars. It is just too risky and expensive to borrow from a 401(k). If you are really strapped, you could halt contributions to your ac- count temporarily, while leaving the balance alone to grow. That would beef up your paycheck with more money to pay down your debt. Stop thinking of your 40l(k) account as your personal ATM machine. That money is simply out of reach for now. My advice is to get busy repaying your credit-card debt from your current income. If you stop adding new pur- chases to those accounts and take advantage of my Rapid Debt-Repayment Plan (www.debtproofliv- ing.com), you will be out of debt in record time — with your 40l(k) account intact, and steadily grow- ing. Dear Mary: What if I put my money in a CD for say one year, but have an emergency and need the money before that? Can I get my hands on it? — Edie Dear Edie: Yes. It would be considered an early withdrawal, and for that, you would be penalized pretty heav- ily. Depending on how far you are from the ma- turity date, they will re- duce the guaranteed in- terest you would have received. The penalty ap- plies only to the interest, however, never to your principal or initial de- posited amount. MaryHuntisthefounder of www.DebtProofLiving. com, a personal finance member website. You can email her at mary@eve- rydaycheapskate.com, or write to Everyday Cheap- skate, P.O. Box 2099, Cy- press, CA 90630. EVERYDAYCHEAPSKATE 3 reasons not to borrow from a retirement account Mary Hunt REDBLUFF Officers of Ma- rine Corps League, Detach- ment 1140, Tehama-Red Bluff recently met to dis- cuss the upcoming Marine Ball at the Elks Lodge, 355 Gilmore Road in Red Bluff on Saturday, Nov. 8 begin- ning at 5 p.m. During the meeting De- tachment 1140 Comman- dant Ray Valenzuela pre- sented to the officers an award from the Depart- ment of California Marine Corps League for Recruit- ing. The detachment was rec- ognized for 100 percent re- cruiting in California. The National Marine Corps League organization was founded in 1923 so that Marines, their families and other veterans, their fami- lies of World War I and the invited public may socialize and enjoy some camarade- rie and community activ- ism and spirit. A raffle will be held for a M1911A1 .45 pistol. Tickets may still be available at the ball. For a $5 donation per ticket one or more tickets may still be available. Tickets to the Marine Ball on Nov. 8 are $35 each. Contact Bertha Moi- erra at 585-2225 by Nov. 1 for tickets and other in- formation. A few Marine Ball tick- ets will be available at the door at the Elks Lodge at 6 p.m. while they last. Detachment 1140 may also be contacted at (888) MCL-1140 or wwwmcl.1140. com. MARINE CORPS LEAGUE Tickets available for upcoming Marine Ball MarinesLelaMartinez(center),RayValenzuela(le ),(and around the table) Buddy Male, Bertha and Harold Morreira, Gil Arellano and Mario Ysit. Today REDBLUFF California HEAT Chorus - Sweet Adelines: 7p.m., Meteer School multipurpose room, 695Kimball Road, 895-0139 Carewear Scrub Sale: 7a.m. to 2p.m., Warde McAuley, 736-1326 Childbirth Class: 6:30p.m., St. Elizabeth Community Hospital, Columba room, Anita 529-8377 Fun Senior Aerobics: 8-9 a.m., $1, Community Center, 1500S. Jackson St. 527- 8177 Grief Support Group: 3 p.m., St. Elizabeth Commu- nity Hospital, Coyne Center, 528-4207 Imagination Train story hour: 4p.m., Tehama County Library Kelly-Griggs House Mu- seum: 1-3p.m., 311Wash- ington St., Group Tours by appointment,527-1129or 527-5895. Live country music: 5-7 p.m., with dinner, Veterans Hall Narcotics Anonymous: 7-8:15p.m., 2595Main St., last Thursday of month Painting session: Red Bluff Art Association, 10a.m., Tehama District Fairground, 529-1603 PAL Martial Arts: 3-5p.m., 1005Vista Way, Ste. C, free, 529-7950 Penny Bingo: 9:30a.m., Community Center, 1500S. Jackson St. Phoenix Community Sup- port Group for chemical dependency: 11:30a.m., Presbyterian Church, 838 Jefferson St., 945-2349 Pinochle for Seniors: 12:30-3:30p.m., 1500S. Jackson St., free, 527-8177 Red Bluff Exchange Club: noon, M&M Ranch House, 645Antelope Blvd. #1 Red Bluff Lions Club: 6 p.m., Veterans Memorial, 527-6616 Rock Choir: 4p.m., 601 Monroe St., free, all wel- come Senior Chair Volleyball: 1p.m. Community Center, 1500S. Jackson St. Sunrise Speakers Toast- masters: noon, 220Syca- more St. Swinging Squares Square Dance Club: 7p.m., Com- munity Center, 1500 S. Jackson St., beginner or review classes: 529-1615 Tehama County Flood Control and Water Con- servation District: 10a.m., 727Oak St. Widows Association of Red Bluff - Dinner: 5p.m., call 527-4659for location CORNING Cal-Fresh and Healthy Family appointments: 1-3p.m., Family Resource Center, 1488South St., 824-7670 Communication and Healthy Relationships (English): 6-8p.m., Corning Family Resource Center, 529-1500ext 118 Dance with Juana: noon to 1p.m., Family Resource Center, 1488South St., 824-7670 Dual Diagnosis Group: 1:30-3p.m., 1600Solano St., 527-8491, Ext. 3309 Sewing group: 9a.m., Fam- ily Resource Center, West and South Streets, 824- 7670 Soccer training: 4-6p.m., except for holidays and rain, Woodson School Soccer Field, 150N Toomes, 824- 7680 Women's Support Group: 6p.m., Family Resource Center, West and South streets, 824-7670 Friday RED BLUFF Celebrate Recovery: 7 p.m., Bethel Assembly of God, 625Luther Road, 527- 0445or 366-6298 CORNING Nutrition Classes: 11:30 a.m. to 1p.m., 175Solano St., 824-7670 LOS MOLINOS Narcotics Anonymous: 7-8p.m., 25204Josephine Ave, Wednesday and Friday Saturday RED BLUFF Frontier Village Farmers Market: 8a.m. to 1p.m., 645Antelope Blvd. TEHAMA Tehama County Museum: 1-4p.m., 275C St., group tours any day by appoint- ment, 384-2595 Sunday RED BLUFF AA Live and Let Live: noon and 5:30p.m., 785Musick St., seven days a week except Thursday meets at 8p.m. Al-Anon New Comers At Heart: 6:30-7:30p.m., Presbyterian Church of Red Bluff, 838Jefferson Road, Room 2, 941-6405 Knights of Columbus All- You-Can-Eat Breakfast: 8a.m. to noon, $5adult, $3 child or $12family, Sacred Heart Parish Hall, 2285 Monroe St., 528-1991 TEHAMA Tehama County Museum: 1-4p.m., 275C St., group tours any day by appoint- ment, 384-2595 Monday RED BLUFF Bend Jelly 4-H: 6 p.m.,Bend School, 527-3101 Community Band re- hearsal: 7-9p.m., Red Bluff Presbyterian Church, 838 Jefferson St., New members welcome, 527-3486 Diabetic Support Group: 6-8p.m., St. Elizabeth Community Hospital, Coyne Center,Columba Room, Gail Locke 527-5290 English as a Second Lan- guage class: 5:30-8:30 p.m., Red Bluff High School Adult Ed building, 1295Red Bud, 736-3308, same time Tuesday and Wednesday and 9a.m. to 12:20p.m. Thursdays, free childcare from 9a.m. to 12:20p.m. classes in Richlieu Hall, 900 Johnson St. Head Injury Recreational Entity: 10a.m.-2p.m., St. Elizabeth Community Hospi- tal, Coyne Center, Rusty, 529-2059 Key to Life: 6p.m., Fam- ily Resource Center, 220 Sycamore St. Ste. 101, 528-8066 Narcotics Anonymous: 11 a.m. to noon, 838Jeffer- son St., Room 3, Monday through Saturday and 5:30- 6:30p.m. Saturday Narcotics Anonymous: 7-8:30p.m., 785Musick St., every day except Thursday Nutrition classes: 10:30 a.m. to noon, 220Sycamore St. #101 PAL Martial Arts: ages 5-18, 3-5p.m., 1005Vista Way, Ste. C, free, 529-7950 Salvation Army Writing Class: 9:30-11:30a.m., 940 Walnut St., 527-8530 Senior Writing Class: 10 a.m. to noon, Sycamore Center, 220Sycamore St., 527-5762 Sons in Retirement: 11:30 a.m., Veterans Memorial Building, 529-5700 Sun Country Quilters Community Service Group: 9a.m. to noon, Family Resource Center, 220Sycamore St. Ste. 101, 528-1126 TeenScreen Mental Health Appointments: 10a.m. to 2 p.m., free, by appointment only, Youth Empowerment Services, 1900Walnut St., 527-8491, Ext. 3012 TOPS Club (take off pounds Sensibly): 8:30 a.m., First Christian Church, 926Madison Ave., 527-7541 or 347-6120, visit www. tops.org US citizenship prepara- tion class: 5:30-8:30 p.m., Red Bluff High School Adult Ed building, 1295Red Bud, 736-3308, same time Tuesday and Wednesday Venture Crew 1914meet- ing: 6:30-8p.m., Moose Lodge on 99W, coed ages 14-20welcome Widows Association of Red Bluff - Play Cards: 1p.m., call 527-4659for location CORNING Alcoholics Anonymous: noon Monday through Friday, 5p.m. Thursday, 7 p.m. Monday, Tuesday and Saturday and 1p.m. Sunday, 783Solano St., behind the church. CALENDAR Complimentary Lifestyle Coaching Needhelpovercomingbadhabits? Struggling with depression, diabetes, hypertension, heart disease? Need a friend to come alongside and hold you accountable? Interested in improving your diet orlosing weight? Wish you knew a health-care professional who has time to listen? Adventist Compassion Care, a non-profit organization sponsored by the Red Bluff Seventh-day Adventist Church, is launching a new service offering free lifestyle coaching. Physicians and dentists will be available every Saturday from 9:30 – 10:30 to counsel with anyone who would like to improve their quality of life, either physically, mentally or spiritually. 527-3733 The location is 720 South Jackson Street Red Bluff. Babysittingisavailable. www.lassenmedial.com RedBluff 2450 Sister Mary Columba Drive (530) 527-0414 Red Bluff & Cottonwood Locations 9am-1pm • November1st • November 15th LASSEN MEDICAL FLU SHOT CLINICS Lassenmedical.com Cottonwood 20833 Long Branch Drive (530) 347-3418 LIFESTYLES » redbluffdailynews.com Thursday, October 30, 2014 MORE AT FACEBOOK.COM/RBDAILYNEWS AND TWITTER.COM/REDBLUFFNEWS B3