Category - 401k Center

1
How Do 403(b) and 457 Plans Differ From a 401(k)?
2
What Do I Need to Know About My 401(k)
3
401(k) – Good For Many, But Not Necessarily the Employee
4
Not So Fast! 9 Special Considerations Before Rolling Over Your 401(k)
5
Don’t Max out Your 401k

How Do 403(b) and 457 Plans Differ From a 401(k)?

403(b) plans, also known as tax sheltered annuities (TSAs), and 457 plans are quite similar to 401(k) plans. Both plans allow employees to defer income and benefit from tax deferred growth, and both plans enable employers to provide matching contributions. 403(b)s and 457 plans, like 401(k)s, have a 2009 contribution limit of $16,500 with an additional $5,500 “catch-up” contribution available to employees over 50 years of age. In most cases, withdrawals from both plans before the age of 59.5 will be subject to a 10% penalty. Finally, required minimum distributions (RMDs) are required from both accounts once the investor reaches

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What Do I Need to Know About My 401(k)

A 401(k) plan enables employees to defer receiving and paying taxes on a percentage of compensation. The salary reduction amount is deducted from the employee’s paycheck and contributed to a retirement fund, where it accumulates earnings tax-deferred until it is distributed. Tax-deferral is advantageous in that it reduces the employee’s annual tax liability, and pre-tax contributions to retirement accounts grow faster than post-tax contributions due to the effect of compounding.

To encourage employees to participate in a company 401(k), many employers make contributions to employee plans in addition to the employee’s contribution. The employer may make automatic contributions to all

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401(k) – Good For Many, But Not Necessarily the Employee

girls on horseback low tide by mikebairdOkay, the title might be a little misleading in regards to how I really feel about 401(k) plans… I do think that these plans are (or can be) good for a lot of folks, as long as they use them correctly and follow sound investing principles.  But that’s not what this post is all about. I recently read a very good article that echoes a sentiment I’ve written about before:  this article speaks to how the 401(k) plan is one of the places that the average Joe Employee is getting ripped off – you can see the actual article hereRead More

Not So Fast! 9 Special Considerations Before Rolling Over Your 401(k)

Conventional wisdom has long told us that when we leave employment – either by taking another job, getting laid off, or retiring – it makes good sense to rollover our 401(k) plans to either an IRA or to our new employer’s 401(k) plan if that makes sense.

However – and if you read here much, you know there’s always a however in life – this decision isn’t as cut-and-dried as conventional wisdom leads us to believe.  As with just about every financial decision we make, it’s not wise to go off willy-nilly without considering all of the benefits that we’re …

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Don’t Max out Your 401k

If you were to get on the Internet and poll the financial gurus, the message you would get load and clear is: Save Money. No matter how much you’ve saved, you will be woefully short when you get to retirement.

The first suggestion of these pundits? Put money in your 401(k). (I will use “401(k) as a surrogate for all retirement savings plans: 401(k), 403(b), SEP, SIMPLE etc.) I’m not against 401(k)s. Actually, I’m a big fan. However, I think the advice is wrong.

Here’s my message: Save 10% of your income. Put your money in a savings account. …

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