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The Best Student Loan Companies For Refinancing

January 24, 2021

Refinancing your student loans can make good financial sense, and that’s especially true if your current loans are stuck at a high-interest rate. With a new loan at a lower APR, you could save a bundle of money on interest each month and ultimately pay your student debt off faster. Consolidating several loans into one new one can also simplify your financial life and make keeping up with bills a lot easier.

College Ave and Earnest topped our list, but since student loan refinancing is an incredibly competitive space, you’ll also want to spend time comparing student loan companies to see who offers the best deal. Many lenders in this space offer incredibly low APRs, flexible payment options, borrower incentives, and more. This means it’s more important than ever to shop around so you wind up with the best student loan for your needs.

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What You Should Know About Refinancing Federal Student Loans with a Private Lender

The lenders on this list can help you consolidate and refinance both federal student loans and private student loans. However, there are a few details to be aware of before you refinance federal loans with a private lender.

Switching federal loans to private means giving up federal protections like deferment and forbearance. You also give up your chance to qualify for income-driven repayment plans like Pay As You Earn (PAYE) or Income Based Repayment (IBR). Income-driven repayment plans let you pay a percentage of your discretionary income for 20 to 25 years before ultimately forgiving your remaining loan balances, so this perk isn’t one you should give up without careful thought and consideration.

Best Student Loan Refinancing Companies of 2021

As you start your search to find the best student loan for your lifestyle, take the time to compare lenders and all they offer their customers. While there are a ton of reputable companies offering high-quality student loan refinancing products on the market today, there are also companies you should probably steer clear of.

To make your search easier, we took the time to compare most of the top lenders in this space in terms of interest rates offered, fees, borrower benefits, and more. The following student loan companies are the cream of the crop, so you should start your search here.

Our Top Picks:

  1. Splash Financial
  2. College Ave
  3. Earnest
  4. SoFi
  5. CommonBond
  6. LendKey
  7. Wells Fargo
  8. PenFed Credit Union

Student Loan Refinancing Company Reviews

1. Splash Financial

Splash Financial may be a newer company in the student loan refinancing space, but their offerings are competitive. This company lets you check your rate online without a hard inquiry on your credit report, and their variable rates currently start at just 2.25% APR.

Not only are interest rates offered by Splash Financial industry-leading, but the company has a 95% customer satisfaction rate so far. Their cutting-edge technology also lets you apply for your loan and complete the loan process online, meaning less hassle and stress for you as the borrower.

Check Out Splash Financial’s Low Rates

2. College Ave

College Ave offers student loan refinancing products that can be tailored to your needs. They offer low fixed and variable interest rates, for example, and you’ll never pay an application fee or an origination fee. You can even qualify for a discount if you set your loan up on autopay, and a wide range of repayment schedules are available.

College Ave also offers a wide range of online calculators and tools that can help you figure out how much student loan refinancing could help you save and whether the move would be worth it in the end. Considering their low variable rates start at just 2.74% APR, there’s a good chance you could save money by refinancing if you have excellent credit or a cosigner with great credit.

Get Started with College Ave

3. Earnest

Earnest is another online lender that focuses most of its efforts on offering high-quality student loans. This company lets you consolidate debt at a lower interest rate than you might find elsewhere, and you get the option to pick a monthly payment and repayment period that works with your budget and your lifestyle.

While you’ll need excellent credit to qualify for the lowest interest rates, loans from Earnest come with variable APRs starting at 1.81% and low fixed rates starting at just 3.45%. To qualify for student loan refinancing with Earnest, you’ll need a minimum credit score of 650 and a strong employment and income history. You also need to be current on all your bills and cannot have a bankruptcy on your credit profile.

Refinance and Save with Earnest

4. SoFi

Also make sure to check out student loan refinancing company SoFi as you continue your search. This online lender offers some of the best student loan refinancing products available today, including loans with no application fee, origination fee, or hidden fees.

SoFi lets you apply for and complete the entire loan process online, and they offer live customer support 7 days a week. You can also check your rate online without a hard inquiry on your credit report, which makes it easier to see how much you could save before you commit.

Get Pre-Approved with SoFi in Less than 2 Minutes

5. Commonbond

Commonbond is another online student lender who lets you check your rate online without a hard inquiry on your credit report. With student loan refinancing from Commonbond, you could easily save thousands of dollars on interest with a new fixed interest rate as low as 3.21%. Repayment terms are offered for 5 to 20 years as well, letting you choose a new monthly payment and repayment timeline that works for your needs.

You can apply for your new loan online and note that these loans don’t come with an origination fee or any prepayment penalties. Your loan could also qualify for forbearance, which means having up to 24 months without payments during times of financial hardship.

Apply Online with Commonbond

6. LendKey

LendKey offers private student loans and flexible student loan refinancing options to serve a variety of needs. You can repay your loan between 5 and 20 years, and their refinance loans don’t charge an origination fee.

You can use this company’s online interface to check your rate without a hard inquiry on your credit report, and variable APRs start at just 2.01% for graduates with excellent credit. LendKey loans also receive 9.3 out of 10 possible stars in recent reviews, meaning their customers are mostly happy with their decision to go with this company.

Save Thousands by Refinancing with LendKey

7. Wells Fargo

While Wells Fargo is mostly popular for their banking products, home mortgage products, and personal loans, this bank also offers student loan refinancing products. These loans let you consolidate student debts into a new loan with a low variable or fixed interest rate, and you can even score a discount for setting your loan up on autopay.

Terms for Wells Fargo loans are available anywhere from 5 to 20 years, meaning you can choose a repayment schedule and monthly payment that suits your needs. Wells Fargo also lets you check your rate online without a hard inquiry on your credit report.

Get Started with Wells Fargo

8. PenFed Credit Union

PenFed Credit Union offers unique student loan products powered by Purefy. You might be able to qualify for a lower interest rate that could lead to enormous interest savings over time, and PenFed lets you choose a repayment term and monthly payment that fits with your budget and lifestyle.

You can apply for student loan refinancing on your own, but PenFed Credit Union also allows cosigners. Low fixed interest rates start at just 3.48% APR, and you can check your rate online without a hard inquiry on your credit report.

Learn More about PenFed Credit Union

What To Look For When Refinancing

If you decide you want to refinance your student loans, you’ll be happy to know the refinancing market is more robust than ever. A variety of lenders offer insanely attractive loan options for those who can qualify, although you should know that student loan companies tend to be very finicky about your credit score. Some also won’t let you refinance if you didn’t graduate from college, or even if you graduated from an “unapproved” school.

While you should be aware of any lender-specific eligibility requirements before you apply with any student loan company, there are plenty of other factors to look out for. Here’s everything you should look for in a student loan refinancing company before you decide to trust them with your loans.

Low Interest Rate

Obviously, the main reason you’re probably thinking of refinancing your loans is the potential to save money on interest. Lenders who offer the lowest rates available today can potentially help you save more, although it’s important to consider that you may not qualify for the lowest rates available if you don’t have excellent credit.

Cosigner Requirements

Also consider that most lenders will offer better rates and loan terms if you have a cosigner with better credit than you have. This is especially true if your credit isn’t great, so make sure to ask family members if they’re willing to cosign on your new student loan if you hope to get the best rate. Just remember that your cosigner will be jointly liable for repayment, meaning you could quickly damage your relationship if you default on your loan and leave them holding the bag.

Low Fees or No Fees

Student loans are like any other loan in the fact that some charge higher fees or more fees than others. Since many student loans come with an application fee or an origination fee, you’ll want to look for lenders that don’t charge these fees. Also check for hidden fees like prepayment penalties.

Discounts Available

Some student loan companies let you qualify for discounts, the most popular of which is a discount for using autopay. If you’re able and willing to set up automatic payments on your credit card, you could save .25% or .50% off your interest rate depending on the lender you go with.

Rate Check Option

Many of the top student loan refinancing companies on this list make it possible to check your interest rate online without a hard inquiry on your credit report. This is a huge benefit since knowing your rate can help you figure out if refinancing is even worth it before you take the time to fill out a full loan application.

Flexible Repayment Plan

Also make sure any lender you go with offers some flexibility in your repayment plan and your monthly payment. You’ll want to make sure refinancing aligns with your long-term financial goals and your monthly budget, and it’s crucial to choose a new loan with a monthly payment you can live with.

Most lenders in this space offer repayment timelines of up to 20 years, which means you could spread your payments over several decades to get a monthly payment that makes sense with your income. Keep in mind, however, that you’ll pay more interest over the life of your loan when you take a long time to pay it off, so you may want to consider prioritizing a faster payment plan.

The Bottom Line

Student loan refinancing may not sound like a lot of fun. However, taking the time to consider all your loan options could easily save you thousands of dollars. This is especially true if you have a lot of debt at a high interest rate. By consolidating all your student loans into a new one with a lower APR, you could make loan repayment easier with a single payment and save a ton of money that would otherwise go to straight to interest without helping you pay off your loans.

The first step of the loan process is the hardest, however, and that’s choosing a student loan refinancing company that you trust. The lenders on this list are highly rated, but they also offer some of the best loan products on the market today.

  • Work with College Ave, our top pick, to refinance your student loan.

Start your search here and you’re bound to wind up with a student loan you can live with. At the very least, you’ll have a better idea of the loans that are available and how much you might save if you decide to refinance later on.

The post The Best Student Loan Companies For Refinancing appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Increasing Your Savings on a Low-Income Salary

January 24, 2021

A low-income salary can create challenges when it comes to reaching your financial goals. You may want to take a vacation, buy a new car, or just put some cash away for a rainy day, but how can you do that with a limited income? Although you may struggle to add to your savings, there […]

The post Increasing Your Savings on a Low-Income Salary appeared first on Credit Absolute.

Source: creditabsolute.com

The Magical Third Paycheck: 5 Budgeting Hacks If You’re Paid Biweekly

January 23, 2021

If you get paid every two weeks, you’ve probably noticed extra money coming your way certain months. Maybe you even thought your company’s payroll made a mistake! But it’s no mistake. You get two magical months like this a year: when you suddenly have a third paycheck and—the best part is—your monthly bills stay the same. Yes, it’s appropriate to jump for joy—provided you have a plan for that extra income.

Why does this happen in the first place? If you’re paid biweekly, you get 26 paychecks throughout the 52-week year. That means two months out of the year, you end up getting three paychecks instead of your regular two.

Those two extra paychecks can go a long way. But without a plan in mind, they can also disappear. Fast. The first budgeting trick to saving two paychecks is to find out when they will hit your account. Grab a calendar and write down your paydays for every month in a given year and highlight the two extras. Maybe even put calendar reminders in your phone so you can track when the additional funds will hit your account. The extra paychecks will fall on different days every year, so tracking them in advance is key.

Samuel Deane, a founding partner of New York City-based wealth management firm Deane Financial, says there isn’t one correct way to budget with an extra paycheck, but that it should depend on your personal situation and financial goals. You could decide to give yourself some extra room in your budget throughout the year, for example, or use the extra money for something specific.

There are a few different ways to budget with an extra paycheck.

How can I budget for an extra paycheck? Consider these 5 budgeting hacks if you’re paid biweekly:

1. Pay down (mainly) high-interest debt

Once you’re done jumping for joy at the realization of the third paycheck, consider how your budget with an extra paycheck could help you pay down debt. “The first thing I usually tell my clients is to get rid of high-rate debt, which is usually credit card debt,” Deane says.

Before paying off debt with your new budget with an extra paycheck, make a list of all of your debts organized by balance and annual percentage rate (APR). Paying off the debt with the highest APR could save you the most money because you’re paying the most to carry a balance. Paying down a few low-APR, low-balance debts can also help you gain momentum and bring other financial benefits. For instance, if you owe close to your credit limit on a credit card, the high credit utilization—or card balance to credit limit ratio—could negatively impact your credit score.

If your budget with an extra paycheck includes debt repayment, you’ll start to owe less and have less interest accruing each month, freeing up even more cash from subsequent paychecks.

“The first thing I usually tell my clients is to get rid of high-rate debt, which is usually credit card debt.”

– Samuel Deane, a founding partner of wealth management firm Deane Financial

2. Build an emergency fund

Paying down debt isn’t the only way to budget with an extra paycheck. “Taking a look at whether you have a sufficient emergency fund is pretty important,” says Dan Stous, director of financial planning at Flagstone Financial Management.

An emergency fund of three to six months of your regular expenses can help you weather financial setbacks, such as a lost job or medical emergency, without having to take on new debt. Keeping these funds separate from your regular checking and savings accounts can help you keep them earmarked for the unexpected (and reduce the temptation to dip into them for non-emergency expenses). Places to keep your emergency fund include a high-yield savings account, certificate of deposit or money market account.

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If creating an emergency fund or adding to an existing one is on your to-do list, a budgeting trick to save two paychecks is to automatically transfer your extra paychecks into your emergency fund account.

3. Save for a big goal

If you want to save for a goal like a new car or home, or contribute to tax-advantaged retirement accounts, contributing two full paychecks out of 26 can be a good start. “If a client is debt-free and doing well, they might be able to focus on other goals,” Deane says. If you’ve got a financial goal in mind, a budgeting hack if you’re paid biweekly is to transfer your two extra paychecks from your checking account to a savings or retirement account right away.

Using your extra paycheck to save for a goal, like a new home or new car, is a smart budgeting hack if you're paid biweekly.

If you have a 401(k) through an employer and already contribute enough to get your maximum annual match, Deane says you may want to consider a Roth IRA. A Roth IRA is for retirement, but it also allows first-time homebuyers who have held their account for at least five years to withdraw up to $10,000 to buy a home, Deane says. Your budget with an extra paycheck could then go to either major goal.

Even loftier, “you could put aside money to start a business,” Deane says. If you plan on starting a business someday you could put away the paychecks annually and let those savings build as start-up capital.

4. Get ahead on bills

If you already have an emergency fund, are currently debt-free and are making good progress on your savings goals, try this budgeting hack if you’re paid biweekly and get a third paycheck: Pay certain monthly bills ahead of time.

“If you have the ability to prepay some of your bills, it can ease anxiety in the coming months,” Deane says.

Before using this budgeting hack if you’re paid biweekly, check with your providers to confirm that you will not be met with a prepayment penalty, and get up to speed on any prepayment limitations. Some providers may even offer a discount or incentive if you pay something like a car insurance bill all at once. You could also explore whether or not prepaying your bills makes sense for utilities, your cellphone or rent.

5. Fund much-needed rewards

If you’re looking for budgeting hacks if you’re paid biweekly, consider that managing money isn’t only about dollars and cents. Emotions often play an important part in personal finance, and they’re often the root cause of people’s decisions. Accepting this fact could be an important part of successfully managing your money.

“From an emotional and behavioral standpoint, people should reward themselves for being responsible,” Stous says. “Basically, treat yourself.”

Perhaps you need a vacation from the daily grind, want to enrich or educate yourself or your family or simply want to get a date night at your favorite restaurant on the calendar. A budgeting trick to save two paychecks could be supplemented with some spending on yourself.

“If you have an extra paycheck and a debt reduction goal, then maybe you apply the whole thing toward that goal. On the other hand, maybe you have a goal to retire in 10 years and you’re off track. Then, it’d be wise to put that money, or at least a portion of it, toward that goal.”

– Dan Stous, director of financial planning at Flagstone Financial Management

There’s no one-size-fits-all budgeting trick to save two paychecks

When you’re deciding how to budget with an extra paycheck, you might find yourself going back and forth between options.

“If you have an extra paycheck and a debt-reduction goal, then maybe you apply the whole thing toward that goal,” Stous says. “On the other hand, maybe you have a goal to retire in 10 years and you’re off track. Then, it’d be wise to put that money, or at least a portion of it, toward that goal.”

Even though budgeting solutions are not the same for everyone, being disciplined and proactive about the savings opportunity of a third paycheck can help you form a strong foundation for your financial future.

The post The Magical Third Paycheck: 5 Budgeting Hacks If You’re Paid Biweekly appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com

The Average Salary of a Pilot

January 23, 2021

The Average Salary of a Pilot

The job of an airline pilot has a certain glamour to it. However, unconventional working hours and plenty of time away from home can be a recipe for stress and burnout. This could be why airline and commercial pilots are compensated fairly well, earning a median annual salary of $115,670. That one number doesn’t tell the whole story, though, as it varies depending on whom you fly for and where you’re based. 

The Average Salary of a Pilot

According to the Bureau of Labor Statistics (BLS), the median salary of the group the BLS calls airline and commercial pilots was $115,670 per year in May 2018. The BLS also tracks the job outlook for the careers it studies, measuring how many jobs the career will add between 2016 and 2026. The BLS job outlook for Airline and Commercial Pilots is 4%, which is about as fast as the average across all careers. According to the BLS, the U.S. will add 4,400 airline and commercial pilots between 2016 and 2026.

Where Pilots Earn the Most

The Average Salary of a Pilot

When it comes to tracking state- and city-level earnings data, the BLS looks at commercial pilots and “airline pilots, copilots and flight engineers” separately. Let’s take a look at where commercial pilots earn the most.

The mean annual wage for commercial pilots is $96,530 per year. According to BLS data, the top-paying state for commercial pilots is Georgia, where commercial pilots earn a mean annual wage of $130,760. Other high-paying states for commercial pilots are Connecticut, New York, Florida and Maryland. The top-paying metro area for commercial pilots is Hilton Head Island-Bluffton-Beaufort, SC, where the annual mean wage for commercial pilots is $128,600. Other high-paying metro areas for commercial pilots are Savannah, GA; Seattle-Tacoma-Bellevue, WA; Bakersfield, CA; Fayetteville-Springdale-Rogers, AR-MO and Spartanburg, SC.

Now let’s take a look at where airline pilots, copilots, and flight engineers earn the most. The top-paying state in this field is Washington, with a mean annual wage of $237,150. Other high-paying states for this profession are Michigan, Nevada, Oregon and California. Of the metro areas for which the BLS has data, the top-paying metro area for airline pilots, copilots and flight engineers is San Francisco-Oakland-Hayward, CA, with a mean annual wage of $247,120. Other high-paying metro areas for this field are Seattle-Tacoma-Bellevue, WA; Las Vegas-Henderson-Paradise, NV; Denver-Aurora-Lakewood, CO; Tampa-St. Petersburg-Clearwater, FL and Chicago-Naperville-Elgin, IL-IN-WI.

Becoming a Pilot

Typically, it’s easier to become a commercial pilot than an airline pilot. Because of this, many airline pilots start their career as commercial pilots. To be a pilot of any kind, you’ll need to have a commercial pilot’s license from the Federal Aviation Administration (FAA).  To be an airline pilot, you’ll need an additional document known as a Airline Transport Pilot (ATP) certificate. This is also issued by the FAA.

In terms of education, you will need a high school diploma and a commercial pilot’s license to become a commercial pilot. To become an airline pilot, you will likely need a bachelor’s degree, although it can be in any subject.

The typical path to becoming a commercial pilot is to complete an FAA-certified flight training program. These are held both at independent flight schools and through colleges and universities. Once you’ve assembled enough flying hours, you can get a job as a commercial pilot.

Regional and major airlines typically require significantly more flight experience for new hires. This is another reason why many people start out as commercial pilots and then move on to working for an airline. According to the BLS, many commercial pilot jobs require a minimum of 500 flying hours, whereas entry-level airline jobs require somewhere around 1,500.

Bottom Line

The Average Salary of a Pilot

Have you ever flown out of an airport and wondered what it would be like to be a pilot? With an average annual salary of $102,520, pilots earn a good living. Not just anyone can become a pilot, however. Commercial pilots must earn a commercial pilot certificate, while airline pilots, copilots and flight engineers must earn the Federal Air Transport certificate and rating for the specific aircraft type they fly. Being a pilot is also a dangerous job, so it’s not surprising that pilots’ compensation is high.

Tips for Saving Responsibly

  • The median pilot salary is enough to live comfortably in most areas of the country, but it’s still important to make sure you’re saving some of that money for emergencies and retirement.
  • A financial advisor can be a big help in managing your money and choosing smart investments that grow your nest egg. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

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The post The Average Salary of a Pilot appeared first on SmartAsset Blog.

Source: smartasset.com

How to Transfer Your 401(k) When Changing to a New Job: 401(k) Rollover Guide

January 23, 2021

It’s easy to forget about old 401(k) plans when changing to a new job. Some people simply forget about it because the company that manages it never reminds them. Others didn’t forget about their old account, but they’ve been putting off the rollover because it sounds hard.

Many companies don’t make the process easy for customers to roll over their 401(k) accounts from previous jobs. But it can be worth the inconvenience.

By not rolling it over, you might be losing some serious cash. That’s right—losing money, so it’s easy to miss. Here are a few key reasons to prioritize a 401(k) rollover.

3 Reasons to Transfer Your 401(k) to a New Job

There are three main reasons to rollover a 401(k):

1. To reduce fees. If the fees are too high with your previous employer’s 401(k), rolling over a 401(k) can be advantageous.
2. To maximize your money. If you aren’t happy with the investment options in your old 401(k) and your new employer accepts rollover 401(k)s, you might be able to save money while investing in a broader range of investment vehicles.
3. To streamline your investments. If you leave your 401(k) where it is, you may not think about it very often. It’s important to keep tabs on all of your investments so you can make sure they are on track and appropriate for your time horizon and goals.

You May Be Paying Hidden Fees

There are all sorts of fees that go into effect when you open a 401(k), including recordkeeping fees, maintenance fees, and fund fees. Expressed in a percentage, these fees inform the expense ratio of a plan.

Employers may cover those fees until you leave the company. Once you’re gone, that cost might shift to you without you even realizing it.

Fees matter: When you pay a fee on your 401(k), you’re not just losing the cost of the fee; you’re also losing all the compound interest that would grow along with it over time. The sooner you roll your plan over, the more you could potentially save.

You Might Be Missing Out on Better Investments

401(k) accounts grow at different rates depending on which assets you invest in. If the retirement savings plan at your new company—or an individual retirement plan (IRA)—offers a selection of stocks and bonds that better aligns with your financial goals, it might be time to initiate a rollover.

The money that’s sitting in your old 401(k) could potentially grow at a faster rate if you roll it over into a new plan or into an IRA—it’s certainly worth investigating the growth rates of each. Keep in mind that investors can lose money when investing, too, so it always makes sense to consider your personal risk tolerance when deciding how to invest your retirement accounts.

You Could Lose Track of the Account

It’s not your fault, it’s just logistics. It’s harder and more time-consuming to juggle multiple retirement accounts than it is to juggle one. Until you retire, you’ll be managing two (or more) websites, two usernames and passwords, two investment portfolios, and two growth rates for decades.

And if you leave this next job to go to a third (or a fourth, or a fifth), the 401(k) plans could pile up, creating even more tracking work for you. Plus, when you’re no longer with an employer, you might miss alerts about changes that may occur with an old retirement plan.

What to do With Your 401(k) After Getting a New Job

While it’s generally allowed to leave your account in your former employer’s plan when you switch jobs, there are other options.

•  Cash out the account. If you take this route and you’re younger than 59½ years old, you will owe taxes and might also owe early withdrawal penalties depending on how you use the money.
•  Roll over the 401(k) account. You could roll the account into your new employer’s retirement plan (if allowed) or into an IRA.

Cashing Out Early

Should you choose to cash out your 401(k), you will have to pay taxes on the money, and perhaps an additional 10% early withdrawal fee.

That said, there are some circumstances when the 10% fee is waived (but not the income tax), such as when the funds will be used for eligible education expenses, certain medical expenses, or expenses related to a first-time home purchase, among other circumstances.

Rolling Over a 401(k) to Your New Employer’s Plan

The process of rolling over a 401(k) might seem intimidating or inconvenient at first, especially if you’re moving onto your second job and this is the first time you’ll be rolling over a 401(k). In actuality, the actual process of rolling over a 401(k) isn’t too complicated once you’ve decided where your existing funds are going to go.

Advantages of Rolling Over Your 401(k)

Rolling over your 401(k) to a new plan can be advantageous to your overall financial plan. Here are a few ways this transition might be beneficial to your financial well-being.

One Place for Tax-Deferred Money

Transferring your 401(k) to your new employer’s plan can help consolidate all of your tax-deferred dollars into one account. Keeping track of and managing one account may simplify your money management efforts.

A Streamlined Investment Strategy

Not only does consolidating your previous 401(k) with your new 401(k) make money management easier, it can also streamline your investment strategies.

Financial Service Offerings

Some 401(k) plans offer financial services, such as financial advisor consultations, to help employees achieve their retirement goals. If your previous employer didn’t offer this service and your new plan does, taking advantage of this offering may help you achieve an investment plan that meets your exact goals rather than a standardized option.

Access to a Roth Option

An increasing number of employers are offering a Roth 401(k) option in addition to the traditional 401(k) option. With a Roth 401(k), the money you contribute is after-tax—it doesn’t minimize your taxable income. But when you take distributions in retirement, you won’t have to pay taxes on the withdrawal amount. As long as the account has been open for five years and you’re over 59 ½, you can receive tax-free distributions.

A Roth 401(k) option can be appealing if you feel your income in retirement will be higher than your current income. If your new employer offers this benefit and you think it will be advantageous to your financial situation, then rolling over your 401(k) to a Roth 401(k) plan may make sense.

How to Roll Over Your 401(k)

So, how do you transfer your 401(k) to a new job? If you decide to roll your funds into your new employer’s 401(k), you’ll most likely need to:

1. Contact the plan administrator to arrange the rollover. You may need to choose the types of investment you would like before you initiate the rollover. If not, you can take a lump-sum transfer and allocate the funds gradually to different investments of your choosing.
2. Complete any forms required by your employer for the rollover.
3. Request that your former plan administrator send the fund via electronic transfer or a check so you can move the funds directly to the administrator of the new plan.

It’s possible that you might have to wait until your employer’s next open enrollment period to complete the rollover, but you might consider using that time to research the plan’s investment options so you’ll be ready when the time comes.

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Rolling Over a 401(k) Into an IRA

If you choose to roll your 401(k) funds into an IRA that’s not employer-sponsored, a direct rollover is the method that takes most of the guesswork out of the transfer. This means that the funds will be taken from your previous account and rolled directly into the new account.

Doing it this way should avoid your previous lender sending you a check and resulting in any unforeseen early withdrawal tax situations.

Opening a new retirement account online is fairly straightforward, but there are some steps to opening an IRA that might be worth reviewing before you start. Once your funds are rolled over, you’ll be able to choose the investments that work for your retirement goals.

401(k) Rollover Rules

When requesting a transfer, you may either select a direct and indirect rollover. With a direct rollover, the check is made out to the financial institution (for your benefit). Because the funds are directly deposited into the new account, no taxes are withheld.

With an indirect rollover, the check is payable to you, with 20% withheld for taxes. You’ll have 60 days to roll over the funds (80% of your previous plan) into an IRA or other retirement plan. If you want to contribute the full amount of your previous plan, you can add money to bring the lump contribution back up to the balance before rollover. At that point, you’d be able to count the 20% withheld as taxes paid.

The Takeaway

There are many benefits to rolling over a 401(k) after switching jobs, including streamlining your retirement accounts and directing your money so that it suits your individual financial needs and goals. While some may view it as inconvenient, it’s actually a straightforward process whether you want to roll over a 401(k) into your new employer’s plan, or into an IRA.

Not sure which rollover strategy is right for you? SoFi Invest® offers retirement savings plan options. With a SoFi Roth or Traditional IRA, investors have access to a broad range of investment options, member services, and our robust suite of planning and investment tools.

Find out how to take control of your retirement options with SoFi Invest.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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The post How to Transfer Your 401(k) When Changing to a New Job: 401(k) Rollover Guide appeared first on SoFi.

Source: sofi.com

Should I Cash Out My 401k to Pay Off Debt?

January 23, 2021

Paying off debt may feel like a never-ending process. With so many potential solutions, you may not know where to start. One of your options may be withdrawing money from your retirement fund. This may make you wonder, “should I cash out my 401k to pay off debt?” Cashing out your 401k early may cost you in penalties, taxes, and your financial future so it’s usually wise to avoid doing this if possible. When in doubt, consult your financial advisor to help determine what’s best for you.

Before cashing out your 401k, we suggest weighing the pros and cons, plus the financial habits you could change to reduce debt. The right move may be adjusting your budget to ensure each dollar is being put to good use. Keep reading to determine if and when it makes sense to cash out your 401k.

How to Determine If You Want to Cash Out Your Retirement

How to Determine If You Want to Cash Out Your Retirement

Deciding to cash out your 401k depends on your financial position. If debt is causing daily stress, you may consider serious debt payoff plans. Early withdrawal from your 401k could cost you in

Deciding to cash out your 401k depends on your financial position. If debt is causing daily stress, you may consider serious debt payoff plans. Early withdrawal from your 401k could cost you in taxes and fees as your 401k has yet to be taxed. Meaning, the gross amount you withdraw from your 401k will be taxed in full, so assess your financial situation before making a decision.

Check Your Eligibility

Depending on your 401k account, you may not be able to withdraw money without a valid reason. Hefty medical bills and outstanding debts may be valuable reasons, but going on a shopping spree isn’t. Below are a few requirements to consider for an early withdrawal:

  • Financial hardships may include medical expenses, educational fees, bills to prevent foreclosure or eviction, funeral expenses, or home repairs.
  • Your withdrawal is lower or exactly the amount of financial assistance you need.

To see what you may be eligible for, look up your 401k documentation or reach out to a trusted professional.

Assess Your Current Financial Situation

Sit down and create a list of your savings, assets, and debts. How much debt do you have? Are you able to allocate different funds towards debts? If you have $2,500 in credit card debt and a steady source of income, you may be able to pay off debt by adjusting your existing habits. Cutting the cord with your TV, cable, or streaming services could be a great money saver.

However, if you’re on the verge of foreclosure or bankruptcy, living with a strict budget may not be enough. When looking into more serious debt payoff options, your 401k may be the best route.

Calculate How Much of Your Retirement Is at Risk

Having a 401k is crucial for your financial future, and the government tries to reinforce that for your best interest. To encourage people to save, anyone who withdraws their 401k early pays a 10 percent penalty fee. When, or if, you go to withdraw your earnings early, you may have to pay taxes on the amount you withdraw. Your tax rates will depend on federal income and state taxes where you reside.

Say you’re in your early twenties and you have 40 years until you’d like to retire. You decide to take out $10,000 to put towards your student loans. Your federal tax rate is 10 percent and your state tax is four percent. With the 10 percent penalty fee, federal tax, and state tax, you would receive $7,600 of your $10,000 withdrawal. The extra $2,400 expense would be paid in taxes and penalties.

The bottom line: No matter how much you withdraw early from your 401k, you will face significant fees. These fees include federal taxes, state taxes, and penalty fees.

What Are the Pros and Cons?

What Are the Pros and Cons?

Before withdrawing from your 401k, there are some pros and cons to consider before cashing out early.

Pros:

  • Pay off debt sooner: In some cases, you may pay off debt earlier than expected. By putting your 401k withdrawal toward debt, you may be able to pay off your account in full. Doing so could help you save on monthly interest payments.
  • Put more towards savings: If you’re able to pay off your debt with your early withdrawal, you may free up your budget. If you have extra money each month, you could contribute more to your savings. Adding to your savings could earn you interest when placed in a proper account.
  • Less financial stress: Debt may cause you daily stress. By increasing your debt payments with a 401k withdrawal, you may save yourself energy. After paying off debt, you may consider building your emergency funds.
  • Higher disposable income: If you’re able to pay off your debts, you may have more financial freedom. With this freedom, you could save for a house or invest in side hustles.

Cons:

  • Higher tax bill: You may have to pay a hefty tax payment for your withdrawal. Your 401k is considered gross income that’s taxed when paid out. Your federal and state taxes are determined by where you reside and your yearly income.
  • Pay a penalty fee: To discourage people from cashing out their 401k, there’s a 10 percent penalty. You may be charged this penalty in full.
  • Cut your investment earnings: You gain interest on money you have stored in your 401k. When you withdraw money, you may earn a lower amount of interest.
  • Push your retirement date: You may be robbing your future self. With less money in your retirement fund, you’ll lower your retirement income. Doing so could push back your desired retirement date.

6 Ways to Pay Off Debt Without Cashing Out Your 401k

6 Ways to Pay Off Debt Without Cashing Out Your 401k

There are a few ways to become debt-free without cutting into your 401k. Paying off debt may not be easy, but it could benefit your future self and your current state of mind. Work towards financial freedom with these six tips.

1. Negotiate Your Credit Card Interest Rates

Call your credit card customer service center and ask to lower your rates on high-interest accounts. Look at your current interest rate, account history, and competitor rates. After researching, call your credit card company and share your customer loyalty. Follow up by asking for lower interest rates to match their competitors. Earning lower interest rates may save you interest payments.

2. Halt Your Credit Card Spending

Consider restricting your credit card spending. If credit card debt is your biggest stressor, cut up or hide your cards to avoid shopping temptations. Check in on your financial goals by downloading our app for quick updates on the fly. We send out weekly updates to see where you are with your financial goals.

3. Put Bonuses Towards Your Debt

Any time you get a monetary bonus, consider putting it towards debts. This could be a raise, yearly bonus, tax refund, or monetary gifts from your loved ones. You may have a set budget without this supplemental income, so act as if you never received it. Without budgeting for the extra income, you may feel less tempted to spend it.

4. Evaluate All Your Options for Paying Down Debt

If you’re in dire need to pay off your debts, look into other accounts like your savings or emergency fund. While money saved can help in times of need, your financial situation may be an emergency. To save on early withdrawal taxes and fees, you can borrow from savings accounts. To cover future emergency expenses, avoid draining your savings accounts entirely.

5. Transfer Balances to a Low-Interest Credit Card

If high-interest payments are diminishing your budget, transfer them to a low-interest account. Compare your current debt interest rates to other competitors. Sift through their fine print to spot any red flags. Credit card companies may hide variable interest rates or fees that drive up the cost. Find a transfer card that works for you, contact the company to apply, and transfer over your balances.

6. Consider Taking Out a 401k Loan Rather than Withdrawing

To avoid early withdrawal fees, consider taking out a 401k loan. A 401k loan is money borrowed from your retirement fund. This loan charges interest payments that are essentially paid back to your future self. While some interest payments are put back in your account, your opportunity for compounding interest may slightly decrease. Compounding interest is interest earned on your principal balance and accumulated interest from past periods. While you may pay a small amount in interest fees, this option may help you avoid the 10 percent penalty fee.

As your retirement account grows, so does your interest earned — that’s why time is so valuable. While taking out a 401k loan may be a better option than withdrawing from your 401k, you may lose out on a small portion of compounding interest. When, or if, you choose to take out a 401k loan, you may start making monthly payments right away. This allows your payments to grow interest and work for you sooner than withdrawing from your 401k.

This type of loan may vary on principle balance, interest rate, term length, and other conditions. In most cases, you’re allowed to borrow up to $50,000 or half of your account balance. Some accounts may also have a minimum loan balance. This means you’ll have to take out a certain amount to qualify. Interest rates on these loans generally charge market value rates, similar to commercial banks.

Pulling funds from your retirement account may look appealing when debt is looming over you. While withdrawing money from your 401k to pay off debt may help you now, it could hurt you in taxes and fees. Before withdrawing your retirement savings, see the effect it could have on your future budget. As part of your strategy, determine where you’re able to cut out unnecessary expenses with our app. Still on the fence about whether withdrawing funds is the right move for you? Consult your financial advisor to determine a debt payoff plan that works best for your budgeting goals.

The post Should I Cash Out My 401k to Pay Off Debt? appeared first on MintLife Blog.

Source: mint.intuit.com

How to Find My Citibank Routing Number

January 23, 2021

Are you looking for your Citibank routing number? It’s quite easy and simple. Below is how to find it.

If you’re sending or receiving money to friends and family members using your Citibank account, you need to make sure you’re having the right routing number.

CIT Bank Savings Rates: How Much Can You Earn

What is my Citibank routing number?

In brief, the Citibank routing number is a nine-digit number that the bank uses to identify themselves. Citibank routing number is sometimes known as ABA numbers, check routing numbers or routing transit numbers.

You need your routing numbers for several reasons. For instance, you need it for:

  • To set up direct deposit
  • For ACH payments;
  • To transfer funds between accounts at different banks;
  • For bill payments;
  • To receive government benefits;
  • To receive tax refunds;
  • For wire transfers;
  • To have payments like paycheck deposited into your account.
*TOP CIT BANK PROMOTIONS*
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CIT Bank Money Market 1.00% APY Review
CIT Bank Savings Builder 0.95% APY Review
CIT Bank CDs 0.75% APY 1 Year CD Term Review
CIT Bank No Penalty CD 0.75% APY Review

Citibank Routing Number For Each State

Citibank routing number is different for each state.  So, it’s important to know it. But your Citibank routing number is associated in the state you opened your bank account.

So, if you have moved to Illinois for example, but you had opened Citibank account in New York, your routing number is associated in New York.

It is as simple as that.

Here is a table of the Citibank routing number by each state:

State Citibank Routing Number
Citibank Northern California (CA) 321171184
Citibank Delaware 31100209
Citibank Illinois (IL) 271070801
Citibank Nevada 322271724/ 322271779/ 321070007
Citibank New York (NY) 21000089
Citibank Texas (TX) 113193532
Citibank Washington DC 254070116
Citibank Connecticut 221172610
Citibank Florida 266086554
Citibank Maryland 52002166
Citibank New Jersey (NJ) 21272655
Citibank South Dakota 21000089
Citibank Virginia 254070116
Citibank California, Southern 322271724
If your state is not included in here, call Citibank at 800-374-9700 for assistance.

Citibank routing number to make ACH Transfers

To make an ACH transfer, you’re going to have to choose the Citibank routing number for your particular state.

For example, if you live in Florida, then you will use the Citibank routing number for Florida which is 266086554. If you live in another state, look at the ACH routing number for your particular state in the table above.

Citibank routing numbers for Wire Transfers

Wire transfers are a quicker way to send money than an ACH transfer. However, there is going to be a fee.

If you’re making a domestic wire transfer, however, you will need to use the routing number in your state, see the table above.

To make domestic wire transfers, and in addition to the routing number, you will also need the following:

  • The name of of the person whom you’re making the transfer to;
  • The name and address of the person’s bank;
  • The person’s account number as well as the routing number.

For international wire transfers, you will need both the Citibank routing number in your state and a SWIFT Code: CITIUS33. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication.

In addition, you will need the following to make an international wire transfer:

  • The name of of the person whom you’re making the transfer to;
  • The name and address of the person’s bank;
  • The person’s account number
  • Purpose of the payment; and 
  • The currency being sent

Where to find your routing number?

So, you want to know where to get your routing number from Citibank? Here’s where to get it:

Your Citibank personal check

You can find your Citibank routing number on the bottom left-corner of a check. However, note the routing number on your check might be different than the routing number for a wire transfer. So, before you’re making a transaction, make sure you check with your bank to get the accurate routing number.

Learn How to Write A Check.

Citibank routing number on this page

We have listed the routing numbers for each state on the table above for ACH transfers. We have also listed the routing number for domestic and international wire transfers.

Your Bank statements

You can find your routing number as well on your monthly bank statements.

Citibank online

Your can find your routing number online by simply going into online banking. 

On the Federal Reserve website

You can look up your routing number on the Federal Reserve website. 

Customer service

Lastly, you can always call customer service at 800-374-9700: to get your routing number. It’s available 24 hour a day, 7 days a week. However, note that you will have to provide some details to identify yourself.

Which routing number to use?

Depending on your financial transactions, you will need to use different routing numbers.

Domestic ACH Transfer

For domestic transfers, use the ABA routing number from your state (see the table above).

For Domestic Wire Transfer

Use the Citibank domestic wire transfer number in your state in the table above.

For international wire transfers

Use your state routing number: and the SWIFT code: CITIUS33

Citibank routing number: bottom lime

In conclusion, if you have a Citibank account, you’ll likely need to your routing number. You will need to set up direct deposit, to set up automatic payments, or to wire transfer. So, it’s important to know it and keep it handy. Also, make sure you verify the number before you make a transaction. If you miss one digit or get one digit wrong, your money can go somewhere else.

Related:

  • Wells Fargo Routing Number
  • How to Find Your Well Fargo Routing Number for Texas

Speak with the Right Financial Advisor

  • If you have questions about your finances, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
  • Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
*TOP CIT BANK PROMOTIONS*
PROMOTIONAL LINK OFFER REVIEW
CIT Bank Money Market 1.00% APY Review
CIT Bank Savings Builder 0.95% APY Review
CIT Bank CDs 0.75% APY 1 Year CD Term Review
CIT Bank No Penalty CD 0.75% APY Review

The post How to Find My Citibank Routing Number appeared first on GrowthRapidly.

Source: growthrapidly.com

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