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Stat Of The Day
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$100
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Some drivers may be getting a surprise from their insurance company – and this time, it’s good news. State Farm says it plans to return $5 billion to auto policyholders through a dividend, starting this summer. Policyholder dividends are essentially partial refunds on premiums, paid when an insurer’s income comes in higher than the amount it needs to cover expenses. According to the company, payouts will average $100 per vehicle.
Not a State Farm customer? You can still lower your bill. Experts say shopping for auto insurance at least once a year can save drivers hundreds – and sometimes thousands – of dollars. Here’s a good place to start comparing quotes.
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Things That Save You Money
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This Week In Your Wallet
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While 401(k) balances have hit all-time highs, more workers than ever before are tapping them to cover financial emergencies. A new Vanguard report shows that last year, a record 6% of workers enrolled in its 401(k) plans took hardship withdrawals – up from 4.8% in 2024 and a pre-pandemic average of about 2%. According to The Wall Street Journal, the most common reasons were avoiding foreclosure or eviction and covering medical bills. The median withdrawal? $1,900.
As the situation in Iran intensifies, you might be wondering – should I do something different with my investments? According to The Washington Post, the best move is often… to do nothing. "One of the biggest traps investors can fall into is using current events to drive their investment strategies…they often overreact to news of geopolitical strife and make changes that they later regret," Christine Benz, director of personal finance and retirement planning for Morningstar, tells The Post. "Most people shouldn’t do anything in response to short-term market events. I much prefer the strategy of checking up on a portfolio on a regular, predetermined basis, once or twice a year or every quarter, at the most." Benz also recommends using an "investment policy statement" to clearly define your goals, target asset allocation and timing for portfolio
changes.
On average, new moms spend just 10 weeks at home before returning to work. Thinking that’s not nearly enough? We’ve got a cheat sheet for asking for longer parental leave – and actually getting it. One key: put together a detailed plan outlining how much time you’d ideally like to take, who will handle your responsibilities when you’re gone and how you’ll train them to cover the workload. "Thinking through this — in as much detail as possible — demonstrates a commitment to the organization," says Jen L’Estrange, founder and managing director of the HR firm Red Clover.
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You’re Not In Debt…You’re In "Recovery Season"
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Staring at your credit card statements and wishing you hadn’t splurged quite so much? You’re not alone.
On a recent HerMoney Podcast, entrepreneur and author Mike Michalowicz shared why how you think about debt matters as much as your plan to pay it off.
"[People in debt] say, ‘I’m in debt’ or ‘I have debt,’ which is a permanent state," says Michalowicz. "That is a challenge when it comes to our psychology because if you believe you have debt, then it’s likely you’re going to retain debt because that’s part of your identity."
Instead, Michalowicz suggests reframing debt as a "recovery season." "The word recovery is a positive term, whereas debt is often perceived as negative," he shares. "If you’re in the recovery season, we’re going to allocate more to paying it off."
Dealing with debt? Check out these resources:
⏰ Which Budgeting Method Can Help You Become Debt Free The Fastest?
🛟 Debt Relief Programs Explained: What They Are And How They Work
🧐 Ask Jean: "How Do I Tackle $20,000 In Credit Card Debt?"
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Ask Jean
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Today’s question comes from Andrea. She writes: I was unexpectedly a victim of a mass layoff. Is it better to leave the money in my current 401(k) until I find a new job, then roll it over into my new employer's retirement fund, or roll it into my personal Roth IRA now?
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I’m sorry to hear about your job loss – and here’s hoping you land something new soon. Your decision here really boils down to personal preference. But here are a few things to keep in mind.
If your balance is over $7,000, you can leave your 401(k) with your former employer. You won’t be able to add more, but if you’re happy with the investment options and aren’t bothered by the fees, it’s perfectly fine to let it sit. The downside is that frequent job changes can leave you juggling multiple 401(k)s, which can be a little cumbersome.
You can also, as you mentioned, roll it into a traditional or Roth IRA. Remember, though, that while a traditional 401(k) can roll directly into a Roth IRA via conversion, the pre-tax amount becomes taxable income in the year you convert it, so you’ll want to be sure you can handle the potential tax bill and that a Roth really fits your long-term plan.
On the flipside, this could also be a chance to explore new IRA options. These days, some are offering pretty lucrative bonuses for new customers to help your balance grow, like this one that has a 1% match on IRA rollovers and transfers, plus a 1% match on your annual contributions.
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Submit your questions to Jean here.
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