Ron Peterson wrote:

- quote -

Suppose your house is big enough, you could also try to rent out a bit
of it. This way your net mortgage costs will go down, and after that,
you will have a regular income. By selling your place you might get a
shocker with the capital gains tax, not to mention that your bank(or
whomever you took the mortgage from) might charge you a penalty for
shutting out the mortgage before time.
And use a credit union to bank with, if you can.

madbh[at]aol.com (Kelly Mullaly) writes:

- quote -

I have some better ideas for you. Find a roommate to help pay your
mortgage, or trade in your house for something smaller that you can
actually afford to live in by yourself on your current income. Get a
part-time job. Get student loans.

-Sandra the cynic

Kelly Mullaly <madbh[at]aol.com> wrote:
- quote -

OK, so far.

- quote -

That's a bad attitude. Unemployment is a shared risk for the employers,
they won't suffer. Work if you can, but keep in mind your carreer goals.

- quote -

Why not sell the house?

--
Ron

In article <285394e7.0409270323.50232f31[at]posting.google.com> , Kelly
Mullaly <madbh[at]aol.com> wrote:

- quote -

This may or may not be legal. Unemployment insurance money is
supposed to tide you over until you find a new job. Most states
require you to be available for work and looking for work in order
to collect. Going to school might not count in your state.

- quote -

In most cases, this is a bad idea. If you think things are going
to be tight now, just think about when you are in your 70's with
no income. What do you plan to use for money then if you cash
out your retirement money now? $8K compounded over 30 more years
is going to be a nice sum of money, more than enough for you to
buy beans and rice, or even a step up from that. Buy if you
blow it all now, you are going to be fighting the local cats and
dogs for the scraps you find in the trash barrels. That is not
a pretty image.

- quote -

That makes for some pretty expensive money, doesn't it?

- quote -

A house is just a box with a roof on it. Why get attached to an
item if that item has the ability to bankrupt you? Why not
consider what you might really need for housing, and perhaps
adjust into something that is more reasonable. After all, at 35,
there is still a chance that you might remarry, and even have
kids, so who knows if the house you have now will work after all
of these life changes. If you have any equity at all in the house,
perhaps the best idea is sell now while prices are high, put
the money in savings, and use this as an emergency fund if you
need it later on.

- quote -

That worries me. Who knows if you will ever become a teacher?
Even if you do, who knows if you will ever get a teaching job?
Maybe you will have a nervous breakdown in 5 years, and not be
able to stand teaching kids anymore. What will that do to your
teaching retirement plan? The bottom line is that YOU need to
worry about your own future. If you get some big windfall from
teaching, so much the better, but don't get caught short if
things don't go exactly according to your plan.

- quote -

Lets assume that you keep the $8K in your retirement account, and
you cash it out when you are 70. If you earn a good savings rate
on the money, that $8000 will grow to $32,000. If you earn an
overall average of 8% on your money (a good balanced rate of
return), it will grow to $118,000. If you put it in the stock
market, and earn the overall average of 11% (the historical stock
market average), it will grow to $309,000.

In this case, you are looking at an $8,000 decision and worrying
about $2,500 in losses. In reality, you would be losing between
$100,000 and $300,000 by cashing out the $8,000. Making a quarter
million dollar mistake will make a difference in your life later
on.

- quote -

All you need to do is call your broker. Ask him/her to create you
a money market account with check writing option. Then ask them to
roll your 401K money into that account. They will do all the paper
work, you just have to go in and sign it.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

I've just been laid off from my job of 4 years. I have a small amount
in my 401K -- $8,000. I'm 35, single and paying a mortgage. I'm also
in school to be a teacher. I have a year and a half left of school. I
was going to have to quit my job in September 2005 to do Student
Teaching, anyway. I have no savings to speak of (no lectures please --
bad marriage/divorce -- long story). I'm going to collect unemployment
for as long as I can -- to concentrate on school and to stick it to my
former employers. I was thinking of cashing in my 401K and putting the
cash in a Money Market to earn a little interest on it. I'd like to
have this for a buffer for my mortgage when the unemployment runs out.
I plan on getting a job then but I wouldn't be able to get anything
that pays all that well AND fits my school schedule. I know that I'll
lose about 30% to taxes and penalties -- that's approx. $2,500 of my
$8,000. I can live with that for the peace of mind it will give me in
not losing my house. (Something I vowed I would not do when my rat
husband left me.) I'm not worried about my future retirement 30 years
from now because teachers get really good retirement benefits.
Besides, I don't see how $8,000 would make much of a difference.
Someone told me that I should have the 401K company convert it to a
cash account, but I can't find any information about this on the
internet or Merrill Lynch's website. Does anyone know about this or
any alternatives to cashing out my 401K that would allow me access to
the money when I need it for my house?
thanks, Kelly