05-02-2019 Columns

If you work for a business that offers a 401(k) plan, consider yourself fortunate, because a 401(k), with its tax advantages and variety of investment options, is a great way to save for retirement. But what if you need to tap in to your plan before you retire? Is it a good idea to borrow from your 401(k)? To begin with, you need to determine if a loan is even available. You can only borrow from your 401(k) if you’re still working for the company that offers the plan, but even so, you’ll have to check with your human resources area to determine if loans are allowed. If they are, you’ll want to weigh the pros and cons before taking action. On the “pro” side, it’s pretty easy to get a 401(k) loan – there’s no formal loan application and no minimum credit score required. Plus, you’re only borrowing from yourself, and you can generally repay the loan with automatic paycheck deductions, typically over a five-year period.

However, you’ll also encounter some “cons” when taking out a 401(k) loan, particularly concerning taxes. If you had not borrowed from your 401(k), the money you took out could have been growing on a tax-deferred basis, assuming you used pre-tax dollars to fund your plan, and your withdrawals will only be taxed once. But when you borrow from your plan, you will have to repay it, along with interest, with money you’ve earned – and been taxed on – and then, when you withdraw it later, you’ll pay taxes on it again. Furthermore, if you leave your employer before fully repaying your loan, the outstanding balance likely will be taxable, although you may have a grace period in which to pay it off and avoid taxes.

And perhaps even more important, taking money from your 401(k), even if you repay it later, will almost certainly slow the growth potential of your account – which, in plain terms, means you may have less money available for retirement. Of course, if you encounter an emergency, and you have nowhere else to turn, you may need to borrow from your 401(k). And some plans allow hardship withdrawals for medical expenses and other needs; although you’ll still be taxed on the amount you withdraw.

But you’d probably be better off if you can prepare, well in advance, for situations in which you need immediate access to a sizable sum. One way of doing this is to build an emergency fund containing six months’ to a year’s worth of living expenses, with the money kept in a liquid, low-risk account. You also might find some resources in the part of your investment portfolio held outside your 401(k). For example, you can always withdraw contributions to a Roth IRA without incurring taxes (although the earnings on these contributions could be taxable if you take the money out before you’re 59-1/2 and you’ve had your account less than five years). In any case, you work hard to build your 401(k) – so, no matter where you are in life think carefully about how you will use the money. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Senior and Veterans Expo

On Monday, May 6, State Senator Aric Nesbitt, State Representative Brandt Iden, and I will be hosting the Annual Senior and Veterans Expo in Antwerp Township, in partnership with the Mattawan Lions Club. The event will be held from 9:00 a.m. to 1:00 p.m. at the Antwerp Township Activity Center, 24821 Front Street in Mattawan. Every year, the Expo helps connect hundreds of local seniors and veterans to resources in their area, and this year will be no exception. There will be many vendors there to assist you, including Bronson Medical staff that will be onsite giving free health checkups! Lunch will also be provided for each attendee, along with goodie bags and helpful informational booklets. In addition to the vendors and services, you will also be able to meet with your elected officials at any point throughout the day. Senator Nesbitt and I look forward to answering your questions and helping you with any problems you may have with state government. If you are in need of transportation to the Expo, ride services will be provided by Van Buren Public Transit and Kalamazoo County Transportation Authority. You can reach Van Buren Public Transit at (269) 427-7921 or toll-free at 1 (800) 828-2015 and Kalamazoo County Transportation Authority at (269) 350-2970. I look forward to seeing all of our seniors and veterans on May 6 at the Antwerp Township Activity Center for the Annual Senior and Veterans Expo! Please don’t hesitate to reach out to my office if you have any questions or if I can ever be of assistance. You can reach my office toll free at 1-800-577-6212 or via email at BethGriffin@house.mi.gov.

Take a hike

As we await summer’s arrival in Southwest Michigan, with its warm, long days, our opportunities for outdoor activities increase, and we are fortunate our part of the state is blessed with near limitless opportunities for outdoor family fun. While we are known for our lakes and beaches, a perhaps lesser known but equally fun, challenging and healthy activity — hiking — is a great way to spend time together and explore nature. The great naturalist and explorer, John Muir, said, “In every walk with nature one receives far more than he seeks.” The National Park Service says hiking is proven to have many health benefits, ranging from physical exercise to emotional and mental relief that comes from being in nature. I agree, and Michigan is home to a vast network of hiking and biking trails. Locally, we have many trail offerings that are ready for your next family adventure. Two I’d like to highlight are the Indiana-Michigan River Valley Trail and the Harbor Shores Trails. According to Michigan Trails Magazine, the Indiana-Michigan River Valley Trail is a growing multi-use paved rail trail system that begins at Plym Park in Niles and passes along the St. Joseph River along the former “Big 4 Railroad.” It connects to a wider network of urban trails running through South Bend, Mishawaka and Notre Dame. The magazine also highlights Harbor Shores Trails, which covers nearly 10 scenic miles along Lake Michigan and the Paw Paw and St. Joseph rivers in Benton Harbor. It is a network of paved and unpaved trails that travel along or over water features, dunes and beachfront. The magazine suggests starting your hike at Jean Klock Park in Benton Harbor. Check out mitrails.org for more information on these trails, including maps and points of interest, and to find other trails throughout our state. If you have not been hiking, or haven’t gone in a while, I highly recommend you give it a try. I appreciate hearing your thoughts on issues facing SW Michigan. You can reach me at 517-373-6960.

Nutritious food for families

WIC stands for Women, Infants and Children. It is a Supplemental Nutrition Program that serves income eligible pregnant, breastfeeding and postpartum women, infants and children up to age five. The program provides a combination of nutrition education, supplemental foods, breastfeeding promotion and support, and referrals to health care. WIC foods are selected to meet nutrient needs such as calcium, iron, folic acid, vitamins A and C. Food benefits are loaded on an Electronic Benefits Card that can be used at WIC approved stores. In Berrien County, an average of 4,000 women, infants and children are enrolled in WIC each month, and provides $30-$112 or more per month for each participant. WIC participants have been shown in studies to have lower infant mortality rates, lower rates of anemia, and lower rates of pre-term and low birth weight babies as women of similar incomes not participating in WIC. The WIC Program strongly encourages and provides support for breastfeeding. For babies who are not fully breastfed, iron-fortified infant formula is available for the first year of life. Infants may also receive infant cereal and fruit juices at age six months. Pregnant and postpartum women and children under age five receive financial assistance to buy foods like milk, cheese, eggs, cereal, peanut butter or dried beans or peas, and fruit and vegetable juices. Women who are exclusively breastfeeding their babies receive extra food, including carrots and canned tuna. For more information about WIC or to see if you qualify, call the Berrien County Health Department at (269) 926-7121 or visit us online at www.bchdmi.org or on Facebook at www.facebook.com/bchdmi.

Our nation’s growing economy

Last Friday, the Bureau of Economic Analysis reported that the U.S. economy grew by 3.2 percent in the first quarter, exceeding expectations. It was the best start to a year since 2015. This is great news for our nation’s growing economy and demonstrates that our efforts to roll back regulations and reduce taxes are working.

The truth is that job creation and economic growth have always been some of my top priorities. Michigan is home to over 870,000 small businesses that employ over 1.8 million individuals who are leading the way in job creation, economic growth, and incredible innovations.

I regularly meet with our local small business owners and know the significant financial risk they take in order to pursue their dreams of owning a small business. That is why I am proud to advance policies in Congress such as tax cuts, regulatory reform, and lower healthcare costs, to enable our small businesses to thrive. Moving forward, I am committed to fighting for bipartisan policies that will continue to spur job creation, grow the economy even more, and deliver real results for Michigan’s sixth district.

To learn more about important legislative issues, follow me on Twitter at @RepFredUpton or visit my website: upton.house.gov. You can also call my offices in Kalamazoo (269-385-0039), St. Joseph/ Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).