Category - 401k Center

1
Foreign Beneficiaries: Can A Non-Resident Alien Be Named A 401(k) Beneficiary?
2
Pros And Cons Of The Roth 401(k)
3
How Dollar-Cost-Averaging Can Work To Your Advantage For Your 401(k)
4
What Is A 401(k)?
5
What Happens To My 401(k) At Retirement?

Foreign Beneficiaries: Can A Non-Resident Alien Be Named A 401(k) Beneficiary?

In today’s global economy, it’s becoming more common for family ties to stretch around the world. You should have no problem naming your nephew as your beneficiary, but accessing the money from India after your death is more complicated.

When naming a nonresident alien as a retirement plan beneficiary, make sure to include more information than the typical name, relationship, and date of birth. The issue here is that the plan sponsor, in your human resources department, will be expected to contact and verify your beneficiary. They may begin to lose patience if the process turns into “Where in the …

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Pros And Cons Of The Roth 401(k)

The Roth 401(k) first became available in January 2006, is an option available for employers to provide as a part of “normal” 401(k) plans, either existing or new.  The Roth provision allows the employee to choose to direct all or part of his or her salary deferrals into the 401(k) plan to a separate account, called a Designated Roth Account, or DRAC.

The DRAC account is segregated from the regular 401(k) account, because of the way the funds are treated.  When you direct a portion of your salary into a DRAC, you pay tax on the deferred salary just the …

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How Dollar-Cost-Averaging Can Work To Your Advantage For Your 401(k)

When you invest in your 401(k) plan with salary deferrals from each and every paycheck, you are taking part in a process known as Dollar-Cost-Averaging (DCA).  This process can be advantageous when investing periodically over a long span of time, by smoothing out the volatility of the market and giving you an average cost of your investment shares over time.

How does this work, and how can it be advantageous?

Dollar-Cost-Averaging

When deferring income with each paycheck, typically you will be investing in your 401(k) plan each pay period, whether monthly, bi-weekly, or weekly.  Each pay period the same amount …

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What Is A 401(k)?

Many of us have access to a 401(k) plan at our workplace – have you ever wondered exactly what a 401(k) is?

The 401(k) plan is named for a specific section in the Internal Revenue Code – Section 401, subsection k, to be exact.  This code section lays out the rules for these retirement plans, which are employer-sponsored plans providing a method for the worker or employee to defer a certain amount of income into a savings plan on a pre-tax basis.

Often the employer also includes a matching contribution to the employee’s account.  These matches are typically based upon …

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What Happens To My 401(k) At Retirement?

You have been saving into your 401(k) for years, and are finally approaching retirement. What will happen to your account? What choices do you have, and what should you do? You actually have a couple of options, and several pitfalls to be aware of. Some of these pitfalls could cost you big time, so be sure to stay on top of them!

Options


1. Rollover to an IRA

After you have officially separated from your employer, you can rollover your 401(k) to an IRA. Rollover just means that the money goes from one account to another without being taxed. If …

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