Make the Most of Unused Vacation

 From The Wall Street Journal


Taking vacation pays dividends -- especially if your company allows you to put unused vacation or sick-leave days into your 401(k) or profit-sharing plan.
To encourage savings, the Obama administration recently blessed such transfers. While companies may have to amend their benefit plans to allow it, the administration hopes firms will do so. "We tried to build in as much flexibility as possible to make it attractive," says Mark Iwry, a senior Treasury official.


The techniques are available for use with all qualified plans, which include 401(k), Keogh and profit-sharing plans but not individual retirement accounts or SEP-IRAs. While the rules don't currently extend to the 403(b) plans used by nonprofit organizations, the Treasury is willing to consider expanding them to include such plans, Mr. Iwry says.
The rules apply to "cash-outs" of unused vacation, sick leave or personal days that occur either annually or when an employee leaves a job. If an employer pays for such leave either in whole or in part, the worker could contribute the entire payment to the company's plan, unless he or she has already maxed out the annual contribution limit. This year the limit for most workers is $16,500, or $22,000 for those over 50.



Employers that don't currently pay workers for unused leave may want to reconsider their policies. The transfers compensate workers and encourage savings but don't increase base pay.
Companies can opt to pay workers for unused leave only if they bank the money in a 401(k) or other qualified plan -- in effect requiring employees to save or else forgo the money. A firm also may let employees decide whether to save or spend.
While firms that choose to pay for unused leave must offer it as an option to all plan participants, they don't have to offer it every year. They also can prorate or limit the amount of leave they are willing pay for.Book early and save! Find special deals in hot destinations only at Expedia.com!

Will payments for unused leave get an employer match? Unclear. The answer depends in part on how a firm's plan is written, says Cara Welch of World at Work, an association of human-resources professionals. What is clear is that the plan must remain nondiscriminatory.


Mr.Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for 11 years. He manages www.beingbrokesuckstoday.com and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
Follow me on twitter

Do you feel trapped living paycheck to paycheck?

Counting down the hours until payday? You're not alone.

























I found this article on www.consumeraffairs.com

                                                                        

Six-In-Ten Workers Live Paycheck To Paycheck, Survey Finds

As the economic downturn trudges on, many workers are struggling with household budgets. About six in 10 workers -- 61% -- report they always or usually live paycheck to paycheck just to make ends meet, compared with 49% last year and 43% in 2007, according to a new nationwide survey of more than 4,400 workers by CareerBuilder.

Thirty percent of workers with salaries of $100,000 or more report that they too live paycheck to paycheck, versus 21% in 2008.

Some workers are making ends meet by dipping into their long-term savings. More than one in five workers say they have reduced their 401(k) contributions or personal savings in the last six months to get by. Among workers earning six figures or more, a nearly equal number -- 23% -- report that they have also reduced their 401(k) contributions or savings.

While some workers are tapping into their long-term accounts, others are having a hard time saving anything at all. More than one-third -- 36% -- say they do not participate in any programs such as a 401(k), IRA or retirement plan, compared with 31% in 2008. In addition, one-third report that they don't put any money aside into their savings each month, while 30% set aside $100 or less per month for savings and 16% save less than $50. Games, games and more games! Try over 200 games for free at PlayFirst.

"Workers are employing a variety of tactics to help make ends meet in this economy," said Rosemary Haefner, vice president of human resources for CareerBuilder. "Whether it's by keeping a tighter budget, finding ways to bring in additional income or adjusting their savings strategies, workers are doing their best to weather the current storm. These good financial habits will not only help workers in the short term, but better position them for the future."

Haefner offers the following tips for riding out the economic downturn and preparing for the future:

• Keep track of spending. Create a spreadsheet to analyze what you spend each month, including the money spent on those inevitable invisible expenses, such as a morning coffee, cab ride or afternoon snack. Once you can see where your money goes, you can clearly see where you can cut back.
• Boost your income. One in 10 workers report taking on a second job in this economy to help make ends meet. Ask yourself if this is something you can handle on top of your current job and then pursue some viable options.
• Speak up. Talk to your HR department and see what is available to help you save on your monthly expenses. Even though times are tough, companies are still offering flexible spending accounts, wellness benefits, retail discounts, transit reimbursement and more.

written by James Limbach          




Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages www.beingbrokesuckstoday.com and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
Follow me on twitter