Retirement is coming, if it is not already here for you.  If you have income for which to fund a 401k or to contribute to an IRA, I would like you to think about these three questions I answered in this article, and the list of tips I also present in this article.

If you already have a 401k or IRA for retirement savings, you should read carefully, because a “game plan” concerning how you are going to use your retirement savings- or not use your retirement savings- is a very important foundational building block when it comes to retirement savings.  Decisions about your 401k and decisions about bankruptcy are intertwined for many people.

• Question 1: Should I file for chapter 7 bankruptcy to wipe out debts? Or in the alternative should I not file for bankruptcy but instead cash out my 401k to pay off debts?

• Answer:  With only a few exceptions, I strongly recommend a bankruptcy filing over 401k withdrawals.

• Question 2:  Should I file for Chapter 13 bankruptcy reorganization over cashing out a 401k account with the purpose of staving off a foreclosure or preventing vehicle repossession?

• Answer:  With few exceptions, I strongly recommend a Chapter 13 bankruptcy reorganization over cashing out a 401k account with the purpose of staving off a foreclosure or preventing vehicle repossession.

• Question 3: Should I take out a loan or cash out a 401k or IRA in order to pay Federal Income Tax debt?

• Answer: You can almost always pay back the federal income tax debt interest and penalty free through a Chapter 13 bankruptcy reorganization, or alternatively you often can enter into a very reasonable tax repayment plan with the IRS.  Sometimes, very old Federal Income Tax debt is even erased by bankruptcy.  Thus, for many people tax repayment though chapter 13 plan can make more sense than a 401k loan or IRA cash out.  There is an additional benefit: although most people don’t realize it, if your income is not super-high, you still can often wipe out credit card debts, eliminate second mortgage obligation and write off medical bills without any repayment of these debts by filing a chapter 13 case, so in many regards, a chapter 13 case can wipe out debt much like a chapter 7 case, with the added benefit of an easy cheesy Federal Income Tax repayment plan- and state tax can be repaid easily though chapter 13 too!

These are some more very important tips about how to handle your 401k, IRA, VIP, TSP or other tax deferred retirement savings, courtesy of a great article from Forbes.com which you can find here:

http://www.forbes.com/pictures/lmf45ekmg/can-you-reach-the-max/