So per the last post, The Ghost is being shown the door. So as you should do, I checked my accounts to confirm [again] my financial situation. I reached out to the representative of the company that a large amount of my retirement account balance lives in. What I was told left me in tears.
I'm not kidding.
If you work for the state of NJ you need to read this because there is a high likelihood that you are unaware of what's going on with "your" money. So when I started working for the state of NJ, I had a 403b. At some point, the actual year I do not recall, when I increased my contributions, A second account was appeared on my paycheck. My mistake was that I was only concerned about the total being deducted rather than asking WHY there was a second line with a different code?
Well apparently this line represented the fact that this money was going into a 401A account. What is that? I cannot exactly describe it to you but it contains a SERIOUS kicker if you are less than 55, and I'll add less than 40. Here';s the kicker:
You do not have access to the employer matching contribution. Nor do you have access to the *gains* made on the employer contributions. Since most of the time the employers *match* the employee contribution, this means that whatever your total amount is in these accounts, you only have access to at most 50% of it until you are 55.
So say you are 45 and amassed $500,000. You get the boot from your job or leave on your own and was looking to tap your retirement (20% tax hit along with 10% penalty) you suddenly only have access to 250k. Of course in REAL terms you only have access to 70% of that ($175k).
So if you got into a long stretch of unemployment, you have far less to fall back on than you thought.
Now sure that portion you can't touch is still growing (hopefully) while you can't touch it, but damn, Imagine not realizing you can't touch it when you needed it? What if you have far less than $250k and now when you thought you had a year's cushion, you barely have 6 months.
So why have I posted this?
Well if this situation applies to you, I want you to contact your financial advisor and find out what is allocated where and what you have access to for an extended emergency...like legal representation.
