A viatical settlement is the sale of a life insurance policy by the policy owner before the policy matures. Such a sale, at a price discounted from the face amount of the policy but usually in excess of the premiums paid or current cash surrender value, provides the seller an immediate cash settlement. Similar to reverse mortgages, viatical settlements involve insured individuals with a life expectancy of less than five years. In countries with high health care costs (such as the United States), this is a practical way to pay extremely high health insurance premiums and other senior care expenses that severely ill people face. Some people are also familiar with life settlements, which are similar transactions but involve insureds with longer life expectancies (two to fifteen years). - From Wikipedia and other sources 5/2007The 401k Retirement Plan
Do you have a 401k? Do you understand how it works? A 401k is a very popular retirement plan that many employers offer and many people take advantage of. It allows you to deposit money into an account to save for retirement. Usually your employer will also deposit a certain amount in the fund as part of a benefits package.
There are regulations concerning depositing money into and withdrawing money out of a 401k and you should understand them before you open an account to make sure your don't incur unnecessary fees. A 401k retirement account is sponsored by your employer and your deposit into the account is taken directly from your paycheck before taxes are calculated. You don't pay taxes on that money until you withdraw it. If you change employers, it is usually possible to switch your 401k to your new place of employment.
If you withdraw the money in your 401k before you reach the age of 59 1/2, then you will have to pay a penalty. If you wait until you are 59 1/2 you can with draw the money but you will still have to pay taxes on it as income. It isn't a double tax because you did not pay taxes on it when you first deposited the money into your 401k.
The money in your 401k is invested in stocks or in which ever method you choose, so it is a good idea to monitor and review your account often to see how it is doing. You want to make sure it is growing at a healthy rate. You can hire a financial advisor for help in deciding the best way to grow your 401k, but besides that, you don't have to worry much about it after you sign up since the deposits are all handled automatically before you get your paycheck. A financial advisor can also help you understand the regulations about rolling over your retirement account should you want to. He will also be able to help you when time comes to withdraw the money when you retire. You work hard for your money and a financial advisor can help make your 401k work hard for your retirement.
Miodrag Trajkovic is a professional retirement planner and owner of popular and comprehensive Retirement information web site. For more articles and resources visit his site at:
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