Finance Blog

Stay financially savvy with the Equifax Advisor.

Sign up for our FREE Monthly Email Newsletter


Thank you for signing up for the FREE Equifax monthly newsletter

In addition to keeping in the financial know, you may be interested in checking your credit score and report.

Understand your credit. Help protect your identity.

Equifax Complete™ Premier Plan

  • Know What May Influence Your Credit Score and Be Alerted of Changes
    Credit score monitoring with custom alerts
    Important Disclosure: The Equifax credit score and 3-Bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.¹
  • Help Protect Your Identity
    Automatic fraud alerts encourages lenders to take extra steps to verify your identity²
  • Lock Your Credit
    The ability to lock and unlock your Equifax Credit Report³
Save 75% your first 30 days with the purchase of Equifax Complete™ Premier

$4.95 for the first 30 days, then $19.95 per month thereafter. You may cancel at any time; however, we do not provide partial month refunds.4

¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.

²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.

³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.

4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.

Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.

Why You Shouldn’t Withdraw Your Retirement Funds Early

Written by Eva Rosenberg on August 14, 2014 in Retirement  |   1 comment

After a lot of scrimping and saving, you’ve finally started building up some retirement savings in the form of a 401(k) or IRA. If you’re lucky, you may even have an emergency fund set aside in a savings account. But your financial situation could quickly…

why-you-shouldnt-withdraw-your-retirement-funds-earlyAfter a lot of scrimping and saving, you’ve finally started building up some retirement savings in the form of a 401(k) or IRA. If you’re lucky, you may even have an emergency fund set aside in a savings account.

But your financial situation could quickly change, whether as a result of a layoff, a medical emergency, or a spouse’s drop in income. While it can be tempting to tap into your retirement account in order to keep up with payments or avoid losing your home, this is a bad idea.

Why should you avoid withdrawing funds from your retirement account?

For both federal and state income tax purposes, all of the money you withdraw from your retirement account is taxable. If you’re under age 59 1/2, you also face early withdrawal penalties: 10 percent from the IRS, plus whatever your state charges.

Additionally, the plan administrator is required to withhold 20 percent of your distribution to pay the IRS. You still pay taxes on that money, even though you never receive it, and this 20 percent is generally not enough to cover your IRS taxes in full. The 20 percent also doesn’t cover your state taxes—for which you’ll still be responsible—and when April 15 rolls around, you will have to come up with more money to pay the tax balance due on these funds.

While there are special exclusions for certain uses of funds when you’re unemployed, they only apply to funds drawn from an IRA and not a 401(k), 403(b), or other pension account. To get the exclusion, you must first move the money from your retirement account into an IRA and then draw the money from the IRA. After all of that, the only benefit you receive is that you avoid the early withdrawal penalty. You must still pay the taxes on the funds drawn.

By the time you take into account all the taxes and penalties due on the cash you actually receive, after withholding, your effective cost for using that money is often well over 50 percent.

What’s worse is that using those funds now will leave you nothing for retirement. Sure, may you desperately need the money now, but if you spend it you’ll never save it up again. There is likely a better way.

What are your alternatives?

Look for a cheaper source of funds. If you haven’t waited until you’ve defaulted on key debt, you can use your credit. You may want to find out if you can get a home equity line of credit (Incidentally, it’s a good idea to have one of those handy while times are good. It’s easy to tap into when there’s an emergency.) or use your credit cards, as their interest rate is generally lower than 50 percent.

(Tax tips: Writing off the interest on a home equity line of credit)

Whatever line of credit you choose, use it for a year or two. Also ask your friends, family, and banker for help. If you have always been a responsible person, someone may trust you enough to help you out, as long as you are taking other positive steps to help yourself.

I think the best alternative is this: start a business. Look around for something the community needs, and set yourself up to provide it. With a business in place, you can set up a solo-401(k), into which you can roll your existing retirement funds.

If you’re married and your spouse is in business with you, you can also roll your spouse’s funds into his or her own solo-401(k). Each of you can now borrow up to 50 percent of the funds in those 401(k)s, up to $50,000 from your respective accounts, tax-free. You will be paying yourself back over a specific number of years, so you will replenish that account. And because you’re really running a business, you’ll be back on your feet in no time!

Eva Rosenberg, EA is the publisher of TaxMama.com ®, where your tax questions are answered. She is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com and tax courses you might enjoy at http://www.cpelink.com/teamtaxmama.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.

1 comment

  1. MoneySmartGuides says:

    I didn’t think getting a HELOC was a good idea either. Ideally, you wouldn’t have to do either one of the options.

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Retirement Archive