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.
It should not come as a shock that there are certain costs involved in maintaining a…
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 …Read More
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 …Read More
Conventional wisdom says that when you leave a job, whether you’ve been “downsized” or you’ve just decided to take the leap, you should always move your retirement plan to a self-directed IRA. (Note: when referring to “retirement plans” in this article, this could be a 401(k) plan, a 403(b), a 457, or any other qualified savings deferral-type plan).
But there are a few instances when it makes sense to leave the money in the former employer’s plan.
You have several options of what to do with the money in your former employer’s plan, such as leaving it, rolling it over …Read More