In part one of our financial Q and A series, Jamie answers questions about your 401(k), refinancing a mortgage, what to do if your credit score is bad, and recovering from debt.
This month, Jamie answers questions about 401(k)s, getting out of debt, mortgage issues, improving your credit score and more.
What's the best way to handle a mortgage when the mortgage is more than the home is worth? Refinance? Short sale and get out? Or foreclosure? - Rob, Lake Worth, FL
There are considerations for each of the options you mention:
I appreciate the article regarding how to keep your credit score healthy, but what if one already has a bad credit score? Can you assist with steps to help remedy a poor score? - Michael, Houston, TX
Repairing your credit and credit score is possible, though it can take some time and dedication. Let's start with the fundamentals:
I'm afraid to do business with banks who are taking funds via the U.S. stimulus package? Should I be? **- Eydie, Louisville, KY
The type of business you are doing with the bank will determine how safe your money will be. The FDIC (Federal Deposit Insurance Corporation) provides deposit insurance for member banks to guarantee the safety of your funds. Traditional bank accounts such as checking, savings, certificates of deposit, IRAs and some others are generally insured up to $250,000. Some investments such as stocks, bonds, investments or life insurance are not insured. When comparing financial institutions, ask questions about their FDIC status and request an FDIC brochure.
To review in detail what is, or isn't, insured by the FDIC, see the following Website
I have temporarily stopped contributions to my 401(k): when should I start contributing again? Also, what is the easiest way to transfer my 401(k) to an interest-bearing account instead of the current "stock market" type account it was created in? - Karen, Louisville, KY
Many people today think this is a bad time to invest in their 401(k) plan because of the decline in the stock market. For those interested in long-term investing, this may be an ideal time to restart or continue contributing. As prices are generally low, you could potentially see significant increases in value over time. The key is to make a plan and re-evaluate along the way.
You should contact your 401(k) provider to see what transfer options are available. You may be able to select a Roth IRA option or disperse funds to another kind of account. Be aware of all tax and penalty implications if you choose to make changes. If you are closer to retirement, you may want to consult a financial advisor.
Jamie Turner is a consultant in Humana's Human Capital Performance Group. Jamie joined Humana in 2008 to lead the development of the "My Money, My Health, a guide to financial fitness" program. Jamie has a BBA from Marshall University and a MBA from Point Park University.
Note: The information available in this article is for informational purposes only and not for the purpose of providing financial advice. Financial recommendations are provided for illustrative purposes only. You're responsible for verifying the accuracy and suitability of all assumptions and calculations. Please seek the advice of licensed or competent individuals before making any investment or financial planning decisions. Don't rely solely on financial or retirement information found in e-PlanProfessor.
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