Attention: Career Transitioners

It's a touchy subject, but a real one that needs to be dealt with: many in corporate America are being downsized--they're getting laid off. Some have emergency reserves to last them a few months while they land back on their feet. In this tough job market, a few months of unemployment may last a few quarters.

Whichever the case, if cash reserves are insufficient for living expenses, many have to resort to dipping into their qualified retirement savings plans, whether they are 401K's or IRA's. The catch is that if the candidate is under age 59 1/2, the penalty for early withdrawal is 10% under IRS tax codes (an additional 2 1/2% for California residents). These penalties are on top of any income tax events.

However, there is a way to withdraw from qualified accounts without incurring those penalties. It is under IRC Section 72(t). Contact me and we can go over how this tax code may provide you some relief. There are also annuity products out there that offer you bonuses of up to 15%, as well as guarantee you an income for life. In this market environment, they provide tremendous advantages in safety of principal, income, and growth.

Unfortunately for some, I feel vindicated...

This is not a case of schadenfreude, as I don't relish in this, but I've had many naysayers, including friends and family, who did not agree with my recommendations of home equity planning, and the implementation of index-based annuities and index-based maximum-funded universal life contracts. Unfortunately, it's been "I told you so."

Fortunately, I helped a few other family members and friends escape the majority of the carnage, as the IUL's have a mininum floor guarantee of 1%. The best part is that when the market recovers, they'll be able to participate in the majority of run up as well--tax-free. But avoiding the carnage is huge, and they sleep at nite. Even better is that due to the resetting of the new starting point, the next year going forward should actually give them tremendous upside. So they are thriving even in this perfect storm of plummeting asset values, whether stocks or real estate.