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Hi, I'm Janet Bodner, editor of Kiplinger Personal Finance magazine. Now one way to pocket extra cash is to tap financial assets you already have. There are some downsides but this could be the rainy day you’ve been saving for.
For example, if you have whole life insurance and that’s the kind that builds up cash value inside the policy you can borrow up to the full cash value and you don’t have to repay the loan.
Now, if you don’t the death benefit will be reduced by an equal amount. Now despite tighter lending standards, you may still be able to tap your home equity loans and lines of credit are still available at attractive interest rates as long as you have more than 20% equity in your home, steady income and a credit score of about 720 or higher.
Now, if you have a Roth IRA, you can withdraw your contributions now not your earnings, just your contributions tax-free and penalty-free at anytime. Just remember, you’ll sacrifice any future growth of the money you withdraw.
Are you getting a tax refund this year? Those checks are nice but why would Uncle Sam hold on to your money for a whole year and you pay zero percent interest and why waiting until next spring to get your money. Instead, adjust your withholding to put more cash in your pocket. Use our handy calculator at Kiplinger.com to see how much you could gain.
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