Early Withdrawal

Archive for January, 2011

Question: Trust Account Question Concerning Bank Foreclosures?

My mother has $100k in a CD, she also has 3 other CDs in the same bank (Wachovia) for a total of approx $60k. The CDs are in a trust account bearing my brother’s and my name. Q: Because it is a trust acct under 2 people’s names does the $100k FDIC rule apply here (meaning she’s covered under FDIC for the full $160k)? Or is it considered just 1 name (“trust”) and therefore she should get out the $60k ASAP and put it in another bank. Wachovia seems to be in trouble and I don’t want to see her lose $60k (even tho she’d get a penalty for Early Withdrawal as these CD’s don’t mature till November 2008). TY for responding.

Answer: It is actually insured by the FDIC for $100k per account. You are completely covered for each account.
Wachovia is the worst bank on screwing people. I would take those to Wells Fargo right away. If you can wait til November it would be great, but I’m not sure I would be willing to trust them.
While each account might be covered, it is still in your best interest to get away from them asap. They will underhandedly try and find a way to take peoples money to cover the cost of their dealings under the table. When they go under, they will be fudging paperwork left and right to cover their exec’s who are stealing money. They will especially hit the highest accounts because they figure those are the people who won’t miss a few hundred dollars missing.

Javaid Kiyani – FREE Property CD (Property Investing Investment)

Question: Would making student loan payments count as qualified higher education cost as far as avoiding the 10% early?

withdrawal penalty? The ROTH IRA distribution is non-qualified, as the withdrawal would be before age 59.5 and the account has not been opened for 5 years. I already paid taxes on the money during the year I converted it from traditional to ROTH, so I’m ok there. Now my only concern is the 10% Early Withdrawal Penalty. Distributions for qualified higher education expenses would nullify the penalty. So question is, do student loans payments ten years after graduation get me around the penalty?

Answer: If you’re withdrawing money you put into the IRA there is no penalty. The penalty is only for the earnings, not what you put in. Since it hasn’t been opened for more than 5 years it’s safe to assume most of the money in there is from contributions, not earnings

Killing IraQ

Question: Where do I place my taxable TSP amount on the 2011 Federal Tax Form?

I am retired from gov’t and I normally place my gross (before taxes) in the Pensions and annuities bo, line16a, and then place the taxable amount on line 16b.

Answer: Same place as last year, lines 16a and 16b.

Lose weight the healthy way: Week One Of the Fat Smash Diet