Category - 401k Center

1
How 401(k) Contributions Affect Your Paycheck
2
Here’s What You’ll Soon Find Out, But Never Knew About Your 401k
3
This is How You Convert An Inherited 401(k) to a Roth IRA
4
Now You Can See How Much Your 401k Charges You Every Year
5
How Much Should You Save in Your 401k?

How 401(k) Contributions Affect Your Paycheck

As you begin a new job, or if you are a longer-term employee who is just starting to make contributions to a 401(k) plan, you are confronted with a question:  How does a contribution to the 401(k) plan impact the final take home pay on my paycheck? Believe it or not, you could actually increase your bottom line assets by reducing your income through a 401(k) contribution.

Let’s work through an example so that we can more completely understand what happens.

Your New Job

So, you’ve started a new job, with an annual pay of $30,000.  We won’t go into …

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Here’s What You’ll Soon Find Out, But Never Knew About Your 401k

After several delays, the Department of Labor has at last issued final rules requiring 401k plans to provide key information to plan participants. Specifically, these new rules will require 401k plan sponsors to disclose detailed information about plan features, investment options, and fees and expenses to participants, beneficiaries, and even workers who are eligible to participate in a plan but don’t.

Implementation of these rules, known as rules 408(b)(2) and 404(a)(5), involves two steps. The first step requires plan service providers to disclose required information to the plan sponsor by July 1, 2012. The next step requires the plan sponsor …

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This is How You Convert An Inherited 401(k) to a Roth IRA

One of the provisions that is available to the individual who inherits a 401(k) or other Qualified Retirement Plan (QRP) is the ability to convert the fund to a Roth IRA.

This gives the beneficiary of the original QRP the option of having all of the tax paid up front on the account, and then all growth in the account in the future is tax free, as with all Roth IRA accounts.

What’s a bit different about this kind of conversion is that, since it came from an inherited account, the beneficiary must take distribution of the account over his …

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Now You Can See How Much Your 401k Charges You Every Year

Next year, 401(k) plan participants will see the true cost of their retirement accounts for the first time – and many will not be pleased. In April 2012, long-awaited Department of Labor rules designed to improve fee transparency in 401(k) plans will go into effect. Consequently, many employers are changing their 401(k) plan provider in an attempt to lower investment fees and provide stronger investment options.

There is an old myth that 401(k) plans are “free.” In fact, in a 2011 survey conducted by AARP, 71% of plan participants thought they paid no 401(k) fees. For this reason, expect to …

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How Much Should You Save in Your 401k?

If you are one of the millions of Americans who contribute to a defined contribution retirement plan, there are two reasons to rethink the level of your contribution for 2012.

The first is that it is well established that contributing less than 10% of your salary diminishes your chance for meaningful retirement income. If you are not maxing out the annual deferral limits, review the level of your current deferrals. If it is less than 10%, implement a strategy to raise the percentage that goes to your retirement account.

If you don’t recall your current deferral percentage, ask your HR …

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