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.

Fidelity Investments

Fidelity, the world's largest mutual fund in terms of assets, loaded up on shares of Citigroup, JP Morgan Chase, and Wells Fargo--in the 4th quarter of 2008. Shares of all 3 have tanked since then, which means investors and savers of 401K's and IRA's should be questioning: what the hell were they thinking?

Those who thought last quarter's precipitous market decline offered a good entry point have been proven wrong. In other words, what seems cheap can get a lot cheaper.

Meanwhile, many workers are being laid off, straining their qualified retirement savings plans even further. For those with liquidity issues, they should look into Rule 72T if they need to dip into their 401K's without incurring the 10% early withdrawal penalty.