I could use some extra money. Can I just take the cash from my 401(k)? Yes you can take the cash, but you may be hit with a 10% IRS penalty if you are under age 59? and pay ordinary federal and state income tax on the value of the distribution. So if there is $20,000 in the 401(k) plan and...more
By Anna Wroblewska Congratulations! Now that you've opened a 401(k) account with your employer and started your contributions, you've taken an important step in retirement planning. Now how can you ensure that you'll get the most from it? 1. Make a diversified investment plan Lack of...more
By Anna Wroblewska. Individual stocks can have unlimited upside and don't come with management fees. So are they a good bet for your 401(k)? Here's how you can decide whether stocks are right for your 401(k) and limit the risks associated with them. Please note: This article assumes that your...more
Did you know that a firm as small as one-person can establish a 401(k)? This is not a new phenomenon. It just never made sense under the old tax law. However, recent changes have made the 401(k) much more attractive for small employers. How attractive? Consider a sole proprietor at age 50,...more
People change jobs many times over a working career. Women marry and change their name over their working careers, many more than once. Adults move on with their lives, sometimes to another city, perhaps you moved across state lines. Some workers will venture across country borders forgetting...more
Your 401(k) plan's ultimate size is primarily a function of two factors - how much you contribute and how much you earn. Of course, you know you should contribute the maximum amount possible ($17,500 in 2014). But what steps should you take to maximize your returns? Consider these tips: Take...more
For the vast majority of workers, a 401(k) plan may be the only retirement plan offered by employers. If you won't receive a traditional pension benefit from your employer, will a 401(k) plan be enough to fund your retirement? Answering that question is difficult because the 401(k) plan has only...more
Effective January 1, 2006, 401(k) plans now have the option to offer Roth 401(k)s. The Roth 401(k) is patterned after the Roth individual retirement account (IRA) - contributions are made from after-tax earnings that grow tax free and qualified distributions are withdrawn tax free. However, there...more
Your 401(k) may be a great retirement-savings vehicle. Your earnings grow on a tax-deferred basis, and you typically fund your plan with pretax dollars, so your contributions can lower your annual taxable income. Plus, you may even get an employer match. But if you're really going to get the most...more
Beginning January 1, 2006 employers have the opportunity to offer a new 401(k) option aimed at decreasing your tax burden during your retirement years. Starting in 2006, 401(k) plans will be permitted to allow employees to designate their contributions as 'Roth' contributions. If offered, your...more
Mistake #1: Thinking the 401k is a "free account" Today's 401k accounts are mainly made up of mutual funds. Unfortunately, most investors have no clue as to how much their 401k costs them. We first need to learn what the fees are. Mutual fund fees come in four flavors: Annual expense fees -...more
It's nice to see another tax-savings option available-one that provides tax-free withdrawals after you retire. This one became available on January 1 and combines parts of two popular plans, a 401(k) and a Roth IRA. Called the Roth 401(k), it allows employees to designate their contributions as...more
Since the fully funded company pension plan is fast becoming a thing of the past, the popularity of the 401(k), the IRA, the SEP and other 'qualified' retirement plans has skyrocketed. And why shouldn't it? After all you get to sock away large portions of your income on a pre-tax basis and then...more
A good thing ? the Solo 401(k) ? just got a whole lot better. A Solo 401(k) plan is already a great tax-advantaged retirement savings vehicle for a business (including corporations) where the owners and their spouses are the only employees. In 2006, tax- deductible retirement contributions can...more
One of the biggest changes in the workplace in the last 30 years has been the shift away from traditional, or defined benefit, pension plans. In their place are a growing number of alternatives known as defined contribution plans. Today, the 401(k) plan is the most common defined contribution...more
Over the years I have worked with hundreds of people guiding them through the rollover maze. I have worked with employees who have worked in small businesses, regional companies, national organizations as well as international corporations. When an employee leaves their place of employment due...more
By Justin Stoltzfus March 8, 2014 Most Americans are generally familiar with the idea of planning for retirement, whether it's through an employer-backed 401(k), a private IRA, or some other investment vehicle. But not all of those who toil away building a 401(k) or other account understand...more
By Anna Wroblewska. Over $650 billion of America's retirement savings are in target-date funds, and these investment vehicles are only getting more popular. Adored by 401(k) plan administrators and investors for their simplicity, target-date funds are expected to attract half of all...more
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