Today, July 10th, 2020, article in Fil-Am Newspaper. Topic is "Cashing out retirements to pay for debts? " Itama po natin! by Ben Lou
Q: I am not of retirement age but I owe $40K in credit card debts, should I just pull money out from my retirement account to pay it off?
A: I have somewhat discussed this before but under a different topic. Retirement accounts are meant for when you do go on retirement. Most of these accounts are tax deferred which means that taxes will be due later when you do pull it out to use when you have retired. If it is pulled out before retirement, a 10-25% penalty is imposed depending on when this retirement account was established and taxes on the amount pulled become due for that tax year. Taxes will be based on how much you made for that tax year plus the amount you pulled out. This will be your Adjusted Gross Income.
Credit cards are unsecured debts. I still don’t understand why people would still want to suffer the consequences of the penalty and the taxes that will become due rather than have their debts be settled. Most of the answers I get from clients is that they owe the money therefore, they should pay it. That would be fine if you had the money or make enough to pay it off conveniently. The fact is, the reason they call me is that they are having a tough time paying them off and want some type of help to be done with it. At the same token this debt did not happen overnight and most of them want a quick solution to their debt problems.
What actually happens is they pull out from their retirement account, pay off the credit cards and now have created a new problem. In the months to come, the same client will call back most certainly and their problem now is with the taxes because they cannot pay the taxes due from pulling out the retirement money early. Now, we have created a new problem which is harder to solve. Even if the client files for bankruptcy, there is no way out on the taxes they owe. And if we were going to end up filing for bankruptcy, there would have been no need to pay off the credit cards. It becomes a web of problems. In short, nanganganak po ang problema natin!
Folks, I do not like to be the bearer of bad news but we are doing it to ourselves. We seek the advice of an expert but we still listen to a little voice in our heads and follow it rather than actually doing the correct thing.
If you are heavily in debt with credit cards, please give me a call so I can provide you with different ways and solutions to be done with them. I always explain to my clients all their alternatives but the road is for them to walk on. The good thing is at Debt Aid Consulting, we hold our clients hands while they are in our programs until they graduate. We also help them with credit repair so that we can take them back to the time that they are able to borrow money, not leave them with a ruined credit.
Ating lesson, Kung ikaw ay matanda na at walang pera, di maiibabalik ang panahon para muling kumita.
If you need help in getting out of debt, call Debt Aid Consulting International. We do not use call centers which keeps your information safe. We have a new program that reconstruct debts for half of what you would pay our competitors. We also provide legal assistance that keeps collectors away. We take Federal Credit Unions, Payday loans and high interest personal loans in our program too. This is exclusively available for Debt Aid Consulting clients. None of our competitors provide this program. You are well protected.
We only provide Federal Trade Commission compliant programs. Go with Debt Aid Consulting!
Do not fall for marketing gimmicks saying that they have the right program for you. Most marketing companies only have one program and will enroll you in that program whether it fits you or not. So beware!
Ben Lou at your service! I have over 35 years of financial experience. If you would like sound financial advice, call us at Debt Aid Consulting International. We do not use call centers. No one has the right to put your information at risk.
Say no to LLC corporations in Canada! Debt Aid Consulting is the first Filipino debt mediation company incorporated in the US and Canada.
Now serving the Caribbean Islands, Singapore, Australia, New Zealand and the Philippines!
Tawag na po sa 09295779325 at tutulungan po namin kayo.
Itama po natin ang mali!
