Category - 401k Center

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Does My Employer Have Control Over My 401k?
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Supercharge Your 401k
3
Watch Out For These Hidden 401k Fees
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Does your Company Have a Match?
5
Dealing With Your 401k During Divorce

Does My Employer Have Control Over My 401k?

So you’ve set up your 401(k) with your employer’s administrator, made your allocation choices, and everything is set to go. You’ve got this retirement saving thing by the tail, right?

Not so, Mona Me. (or is that mon ami?) Or at least not completely so. You see, way back in the bad old 2006’s (before all the hope and change), Congress passed the Pension Protection Act, which had a provision in it that allows employers to automatically enroll employees in retirement plans, and even make default investment choices for them.

Doesn’t apply to me, right? Since I enrolled on my …

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Supercharge Your 401k

New research shows 401k plan participants would be well-served to receive the services of a fee-only independent financial advisor. A Charles Schwab study revealed that 401k participants who sought professional assistance in allocating their assets earned a significantly greater rate of return than those who did not. The data examines 2006 returns and is broken down by age group.

The study reveals the significant value-added benefits 401k plan participants receive when they are educated regarding the impact of risk, return, time and diversification. Additional value was found to be added by advisors who persistently rebalanced a globally diversified portfolio.
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Watch Out For These Hidden 401k Fees

I recently came across this article in WSJ that brought out some of the more interesting reasons that the 401(k) Fee Disclosure legislation is important…  There are two bills under review, one in the House (HR 1984) and one in the Senate (S 401), which aim to improve disclosure of fees within 401(k) plans.  These two bills also address the issue of the qualities that are appropriate for folks who are providing advice to plan participants.  A brief summary of the WSJ article follows:

It should not come as a shock that there are certain costs involved in maintaining a

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Does your Company Have a Match?

Everyone needs to save for the day they hope not to work any more to make ends meet.  If you are comfortable with your job security and have good savings you could get to in a pinch, investing through your company’s retirement plan is worth considering.  Staying on a consistent investment plan through a down stock market can pay off quite nicely when markets recover.  If your company offers to match part of what you contribute to the plan, that’s even better!

So check your employer benefits and see what’s available to you.  Some companies don’t allow employees to contribute …

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Dealing With Your 401k During Divorce

An exception to the 10% penalty on distributions from a qualified plan (but not an IRA) is when the distribution is pursuant to the imposition of a Qualified Domestic Relations Order, or QDRO (cue-DRO).

A QDRO is often put into place as part of a divorce settlement, especially when one spouse has a considerably larger retirement plan balance than the other.  What happens in this case is that the court determines what amount (usually a percentage, although it could be a specific dollar amount) of retirement plan’s balance is to be presented to the non-owning spouse.  Once that amount is …

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