If you don’t use the account properly, you might not save enough or could pay unnecessary fees and penalties. / Credit: Getty Images Having enough money in retirement often requires decades of careful planning, saving and investing. For many Americans, retirement planning runs through their employers via 401(k) plans. These vehicles enable employees to direct […]
Read More401(k) vs. Pension Plan: An Overview A 401(k) and a pension are both employer-sponsored retirement plans. The most significant difference between the two is that a 401(k) is a defined-contribution plan, and a pension is a defined-benefit plan. A defined-contribution plan allows employees and employers (if they choose) to contribute and invest funds to save […]
Read MoreThe 401(k) retirement plan is the most widely known and used employer-sponsored retirement plan. The 408(k) is another type of employer-directed retirement plan in which small business employees can participate. It is also called the simplified employee retirement plan (SEP-IRA). Both the 401(k) and the 408(k) refer to sections of the Internal Revenue Service Tax […]
Read MoreExhale. That’s the advice from several financial experts across the country who said that investors shouldn’t do anything rash with their 401(k) retirement accounts amid a turbulent 2022 stock market. That turbulence was evident this week. The markets rebounded Friday after going into another tailspin the day before. That’s when a historic plunge in the […]
Read MoreAs claims go, it’s a bold one. Over the course of 82 pages, Michael Doran, a much-beloved but press-shy professor at the University of Virginia School of Law who also worked for the Office of Tax Policy at the U.S. Treasury Department under two different administrations, makes the following case: “Over the past twenty-five years, […]
Read MoreWhen you withdraw funds from your 401(k)—or “take distributions,” in IRS lingo—you begin to enjoy the income from this retirement mainstay and face its tax consequences. For most people, and with most 401(k)s, distributions are taxed as ordinary income. However, the tax burden you’ll incur varies by the type of account you have: traditional or Roth 401(k), […]
Read MoreIf you’re considering leaving a job, and you have a 401(k) plan, you need to stay on top of the various rollover options for your workplace retirement account. One of those options is rolling over a traditional 401(k) into a Roth IRA. This can be a very attractive option, especially if your future earnings will […]
Read MoreAfter you leave your job, there are several options for your 401(k). You may be able to leave your account where it is. Alternatively, you may roll over the money from the old 401(k) into your new employer’s plan, or roll it into an individual retirement account (IRA). You can also take some or all […]
Read MoreThe share of Americans coming out of retirement and back into the workforce is finally increasing and could be key to bringing the labor force participation rate back to its pre-pandemic levels. More than 2.6% of retired workers returned to work in October, the highest since April 2020, according to an analysis by Indeed of […]
Read MoreI have just been talking to the so-called “father of the 401(k),” and he’s not happy. It’s more than 40 years since Ted Benna helped launch the famous tax-deferred savings plans that now dominate the U.S. retirement market. But today, he says, these plans are being aggressively missold to sole proprietors and small businesses owners by […]
Read MoreEverythingpossible/Dreamstime Sometimes it’s better to get taxes out of the way earlier when using a 401(k) to save for retirement. Financial planner David Born of Orinda, Calif., advises a couple in the top tax bracket who contribute to Roth 401(k)s rather than traditional 401(k)s, even though it means they pay more in taxes now. The […]
Read MoreIt’s no stimulus check, but 17 million Americans are missing out on free money The promise of free money is typically pretty alluring. After all, the stimulus checks Congress handed out during the early months of the pandemic were enormously popular, and nearly 3 million people have signed a petition calling for more. So why, […]
Read MoreIt’s embarrassing to admit in a public forum that I failed at retirement. But I’m doing so—because I think people can learn from me, and thereby avoid making the same mistakes. I spent my entire 38-year career in the banking industry. Naturally, I learned a lot about money and investing. I helped thousands of clients […]
Read MoreThe income you receive from your 401(k) or other qualified retirement plan does not affect the amount of Social Security retirement benefits you receive each month. However, you may be required to pay taxes on some or all of your benefits if your annual income exceeds a certain threshold—and your 401(k) distributions can cause it […]
Read MoreWhile most people receive Social Security, a secure financial retirement depends on also having significant savings in a retirement account. Typically these savings must last nearly 20 years (assuming the average age for retirement is 63, and the average life expectancy as of 2021 for someone who reaches that age is 12.1 more years for […]
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