Little-known Ways to get out of a Car Lease early

Car lease

It can be fun to drive around in an expensive car that you don’t even own. No more worrying about maintenance, low monthly payments, tax benefits, no need to pay a huge sum upfront and no repair costs. Everything seems to have worked out perfectly.

But there is a catch in leasing a car. What if for some reason you lose interest in that car? Maybe you bought a new one or are going to relocate to another location. Anything can happen and in such a situation you need to find the cheapest way to get out of the car lease.

Here are a few ways you can get out of a car lease early.

1. Transfer your lease

Instead of worrying about the lease cancellation process, you can just find another person who wants the same car and willing to pay off the remaining lease. Find a third party buyer from a site like swapalease.com and get rid of the car forever.

SwapLease is also featured in popular publications like The New York Times and The Wall Street Journal. So, you can trust them to get the job done.

The process of transfer is not at all complicated. You just have to submit the required documents(of the third party buyer) along with a small transfer fee($50-$500). Your original leaser will verify the document and approve the deal.

2. Just return the car

This option is easy but is the least preferred way to get rid of a car on lease. When you return a car that you had on a lease, you are required to pay a hefty termination fee to your leasing company.

Along with the termination fee, you will also have to pay the remaining amount that you owe. Then, the leasing company will either sell or lease the car at an auto auction. This might you only respite as the sooner they sell/lease it, the lesser will be your depreciation amount.

3. Trade or sell the car to a third party

Selling or trading the car you have on lease is another popular and profitable option. You can’t directly go out to sell the car as you don’t yet own it. To find eligible buyers for the car, you need to first buy it from the leasing company(also pay the termination fee).

This method is profitable as you get to decide the price for the vehicle and also get to keep the profits. Secondly, trading the car to another dealer is also a good option. But you won’t get the same amount of profits. The only respite here is you get to avoid paying the taxes as you are not directly involved in the transaction.

Summary

By now you must have understood that there are some pros and cons of getting out of a car lease early. Since you made a deal with the leasing company, getting out it will not be possible without paying the penalty. However, the second option is the best one. Particularly, if the car in a good condition and the model sought-after by many people.

5 Ways Gig Workers Can Save for Retirement

freelancer

Are you a freelancer, gig worker, or a self-employed person looking for ways to save for your retirement?

A huge number of people are realizing the health, wealth and other long term gains of working for yourself than being an employee. In the old days– due to the rise of the industrial revolution– Americans were conditioned to work for a corporation until they got old and then enjoying their twilight years on pension or retirement plans offered by the employers. But things have changed in the past decade.

Gigi workers are on a rise and they are looking for ways to get the same security and benefits that their forebears had. But is it possible to be financially secure while working for yourself?

Here are a few sensible ways a gig worker can save for retirement.

1. Contribute to a self-employed 401(k) or solo 401(k) plan

A self-employed 401(k) or solo 401(k) plan was created for self-employed people who work for themselves and have no employees working for them(other than their spouse, children, family members, etc). This retirement plan has similar benefits to the one that is provided by an employer. You have to contribute each month from your pre-tax earnings. So, you don’t have to feel insecure(as for as your retirement is concerned) just because you don’t work for an organization like others.

2. Open a SIMPLE IRA account

SIMPLE IRA stands for “Savings Incentive Match Plan for Employees- Individual Retirement Account”. With SIMPLE IRA you can contribute each year up to $12,500. People over 50 years of age can also make an additional contribution of $3,000. This makes your annual contribution of $15,500(from pre-tax earnings). Although the contributions are quite less compared to other retirement plans mentioned in this post, a freelance worker with low income might find it suitable.

3. Invest in Mutual Funds

Want the safest and the most profitable investment option for your retirement?

Mutual funds might be your safest bet. According to a report by the Investment Company Institue, “an estimated 100 million individual Americans in 56.2 million households owned mutual funds in mid-2017”. When almost every household relies on mutual funds for their retirement savings, why wouldn’t you, as a freelancer or a self-employed person, invest in them?

4. Make larger contributions with Simplified employee pension (SEP)

Want a retirement plan tailor-made for a gig worker?

SEP IRA is a traditional IRA for a freelancer, gig worker, contract worker, or a self-employed person. Similar to other plans like 401k, the contributions you do to the SEP-IRA are tax-deductible.

Allowance to make larger contributions is the biggest benefit of choosing a SEP IRA as your retirement plan. According to the IRS website, a self-employed person can contribute as much as 25 percent(annually) of his/her net earnings from self-employment. The maximum limit is $56,000 in 2019. This is way higher than the SIMPLE IRA plan.

5. Set up a Payroll deduction IRA

Payroll deduction IRA might be the right choice for someone looking for an easy and fuss-free retirement plan. To get started, you have to establish a traditional or Roth IRA with a financial institution. Secondly, make contributions to the financial institution as per your IRA plan. You do have to pay a $10 setup fee and a $10 annual maintenance fee.

Conclusion

Working for yourself has its pros and cons. Not having financial security is one of the cons of freelancing or being self-employed. But with plans like SIMPLE IRA and SEP IRA, you can easily contribute each month and have your future secured.