Category - 401k Center

1
Hewitt Data Show Jump in 401(k) Company Stock Investments
2
Mandatory IRA/401(k)/403(b) Withdrawals Have Been Eliminated for 2009
3
What if Your Employer Drops its 401(k) Match?
4
Will 401(k) Accounts Be Eliminated?
5
What Should You Do With Your 401(k) When You Change Jobs?

Hewitt Data Show Jump in 401(k) Company Stock Investments

Hewitt Data Show JumpHewitt Associates, the HR consulting firm, tracks 401(k) investing trends for 1.5 million employees of large (> 5,000 employee) companies. Their January 401(k) plan data show a curious fact: employees put more money into their employers’ stock than into any other category.

The Hewitt data are by no means comprehensive, as there are over 50 million 401(k) plan participants in the country, but theirs is one of the few surveys that tracks 401(k) investment behavior in the recent past – the most comprehensive retirement plan data are often more than a year old.  Hewitt’s index is interesting because it …

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Mandatory IRA/401(k)/403(b) Withdrawals Have Been Eliminated for 2009

Just before Christmas of 2008, the president signed the Worker, Retiree, and Employer Recovery Act of 2008. The bill suspended 2009 Required Minimum Distributions (RMDs) for IRAs, 401(k)s and 403(b)s.

The intent of this change was primarily to give a break to retirees whose account balances probably cratered last year.  Normally, when a person turns 70½, he or she is required to begin withdrawing money from most kinds of retirement plans so that the IRS can collect its share of income tax.  In addition to being taxed as income, the funds removed lose the benefit of tax-free accumulation in the …

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What if Your Employer Drops its 401(k) Match?

What do FedEx, General Motors, Frontier Airlines, Eastman Kodak, Motorola, Sears and Unisys all have in common? All have announced plans to cut costs by suspending their matching contributions to employee 401(k) plans. Even Starbucks has announced that it may drop its 401(k) match in 2009.

Employee benefits firm Watson Wyatt Worldwide reported the results of a survey that asked companies about plans for a variety of cost-cutting moves.  3% reported that they had reduced their defined-contribution match as of last month, while 7% reported plans to do so this year. Emily Brandon, at the Planning to Retire Blog,

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Will 401(k) Accounts Be Eliminated?

Back in October, some influential members of the House of Representatives held hearings to discuss overhauling the 401(k) retirement plan system. Soon thereafter, talk radio, the blogosphere, and even the generally-sober Wall Street Journal erupted with dark warnings of a plot afoot to “nationalize” or “confiscate” everyone’s 401(k) plans and convert them to accounts managed by the Social Security Administration.

The House Education and Labor Committee interviewed a number of retirees, activists, and others to open discussion on the possibility of altering the nature of 401(k) accounts.  The discussions were partly a response to the realization that 401(k) holders had …

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What Should You Do With Your 401(k) When You Change Jobs?

This is a question that most people will face sooner or later, since labor statistics indicate that the average person entering the workforce will change jobs at least seven times. What follows is a short discussion of some of the key considerations that should be kept in mind as you evaluate this question. This summary is not personalized financial advice; remember that there will be tax and/or other financial consequences depending on what you decide to do.

Every few weeks, I get some sort of mailing from one of various investment firms urging me to roll my old retirement accounts …

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