Retirement Accounts and Financial Problems
The catastrophic loss of middle class pension assets has been well-documented across the country as continuing economic hardship has stressed middle class budgets to the breaking point. These hard-earned and creditor-protected assets should never be touched or disturbed in any way without the full evaluation and advice of a financial planner or experienced legal counsel.
Over the past five to ten years, we’ve witnessed an unfortunate and historical loss of CT pension and retirement assets that haven’t solved the problems of middle class families in financial hardship.
To learn how to avoid making this mistake and obtain a free consultation, call an experienced financial attorney at the Law Offices of Neil Crane at 203-230-2233 or toll free at 1-888-249-3027.
Reasons For Avoiding Retirement and Pension Withdrawals
There is a long list of reasons to avoid tapping retirement and pension assets to pay household bills or expenses; including:
- Retirement assets are creditor-protected, whereby they can never be taken by creditors, mortgage companies, credit card companies or even taxing authorities
- Retirement or pension assets are tax qualified, such that any withdrawal will trigger a tax bill for State and Federal income taxes on the withdrawn amount.
- Early withdrawal of retirement or pension accounts often creates a severe penalty. This penalty is generally ten (10%) percent in addition.
- Many people don’t pay the tax on early withdrawals and end up with newly created tax debt that comes with high interest rates, late charges and penalties.
- The debts normally paid with early withdrawal pension money are far easier to negotiate and lower than the tax debt left from early withdrawals.
Retirement Withdrawals are Difficult to Replace
The amount of money that can be replaced or put back into retirement accounts is limited by contribution rules based upon earned income so replenishing your retirement can become very difficult or even impossible.
Nearly all debt relief options are far superior to retirement or pension withdrawals.
To learn more about retirement withdrawals, call the experienced Connecticut retirement tax attorneys at the Law Offices of Neil Crane for a free consultation. We can be reached at 203-230-2233 or toll free at 1-888-249-3027 for a free initial consultation.