Should I Invest In 401-K?

Most of us throw all the cautions to the air and deal with our life as it comes. We forget to think about our future and most importantly about our retirement plans. Quite contrary to it, there are some people who take their retirement plans a little too seriously and try out every measure to secure their future. Regardless of the group they belong to, there is always a time when they think or consider about investing in 401-K.

401-K is a retirement plan that allows employees of various companies to save for future. This plan offered by the employers allows the workers to invest a cut out of their paycheck prior to a tax deduction. The plan sounds reasonable, an excellent opportunity even, yet it didn’t end up being a favorite of many people. This raised question among many people whether they should invest in 401K or not? We cannot make a decision for you, but we can, however, guide you to make the right one. Let us show you both sides of the coin and leave it to you to decide for yourself.

Why shouldn’t you invest?

  • The retirement plan takes out 30% – 50% of the paycheck leaving the employees to spend a good part of their life in the miserable money-less state.
  • The 401-K retirement plan takes such a large portion out of your pay that you are left with nothing but just enough to make ends meet which deprives you of an emergency fund.
  • Unlike other plans, this retirement plan is risky, it rises and falls with the stock market and the employee has no control of it.
  • 401-K investment discourages huge savings. It is impossible to save a large amount for a financial goal when most of your paycheck is going to the 401-K and the rest is used for paying for essentials.
  • Once you reach your retirement age and get the 401-K savings, you get tax deducted from it. Also, you cannot invest it due to certain restrictions.
  • The compounding return is so high that once you do get your share you only get 60% of the amount you paid your entire life.
  • The money is safe and sound for the next 30 years but if you got a medical condition or need the money for utmost emergency, you cannot use it without penalty; which basically defeats the purpose.

Why you should invest?

  • This is a good investment plan if you have more than one source of income and can easily spend your life in comfort even if 30-50% of your pay is going towards the investment.
  • The tax advantages of the plan is considerably good and despite all the deductions it still piles up to something good.

401-K basically asks the employees to choose between now and later, so it’s a trade-off between present and future. If you want to have a save future then 401-K is your thing, but for that, the employee will have to live a miserable adult life. And to be honest, there are far better options for employees to choose from.

Why Your Credit Card Information is Important?

There are two main categories of information regarding Credit Cards, first is credit score and the second is credit report. When applying for a credit card, make sure you ask your issuer all the questions regarding the rights you have and what is needed in order to keep your credit score high and in check.

Credit Score

Why is credit score important?

For starters a credit score is the way that companies determine whether you are eligible to receive a loan or a credit card. When you use a credit card, you borrow money which is to be paid off monthly, and when lending someone money, you make sure you know the person well enough to receive full payment.

Credit score is the way that companies keep a check on the people that borrow money. If you have a low credit score it is possible that they may deny you a loan or a credit card, and if it is high, you will receive endless mail and a lot of phone calls asking, if you want to borrow money.

What does credit score depend on?

  1. The first thing that counts as your credit score is your payment history. A habit of paying off your borrowed money on time is a good way to take your credit score higher and failing to meet payment deadlines will result in higher interest rates and lower credit scores.
  2. Second thing that is looked at are your current debts. If you have applied for a loan or a credit card and you already have a heavy payment to make this year, it is possible that your request may be denied as existing debts have a negative effect on the credit score.
  3. The time for which you have had a credit score also what adds to the overall credit score. The longer you have been involved in borrowing and paying, the more the companies will trust you because it gives you a larger credit history.
  4. The final thing that it is dependent on is how frequently you take out loans. The more loans you take in a year, the lower your credit score will be.

Credit Report

Although the credit score is merely a reflection of whatever is in your credit report, the credit report is considered more important because you can dispute some parts of it.

If in case you may think some information on the report is incorrect you may tell your side of the story within a 100 words. These words are attached with your report for inquirers.

When employers want to check a person’s credit history, they are provided with an edited version of the report and not the score.

The credit report is also a good way to keep a check on identity theft. If there are any mistakes that you see in your information such as misspelled name or a wrong date of birth, get it changed immediately.