Published
on: October
11th , 2006
A Direct IRA Rollover
is when your 401k retirement savings (or 401k distributions) are
transferred directly from your old employer's account to your
own Individual Retirement Account through a trustee-to-trustee
transfer. This means the money never actually reaches your hands,
it is wired from your old 401k administrator to your new one.
With this method, no taxes are withheld and you will NOT have
to pay any penalties. (Read
Full)
|
 Published
on: October
5th , 2006
Each 401k plan has its own set of complex rules. For
example, some 401k plans will allow you to store up your 401k
inheritance treasure for years (without any withdrawals and any
taxes being charged on them). However, other 401k plans will want
you to withdraw this inheritance within a certain period of time,
after which you may be assessed a penalty of 10% or more. If you
inherit someone else's 401k, be sure to thoroughly read the Summary
of the 401k Document and all its details to find out what tax
rules apply to your instance of 401k inheritance. Usually, there
are a special set of rules if the deceased 401k saver was your
spouse and you are the beneficiary
of your spouse's 401k retirement savings. (Read
Full)
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Published
on: October 4th, 2006
1) Which
of the following is the correct choice regarding pre-tax and after-tax
401k contributions:
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Published
on: October 3rd, 2006In this section,
we look at the general rules that apply to both the traditional
IRAs and the Roth IRA.
1) Restricted Transactions
You are not allowed to perform all of these following transactions
under both the traditional and the Roth IRA.
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Published
on: September 31st, 20061) From
One IRA to Another
All retirement savings from the old IRA account are withdrawn
by the retiree and the IRA Custodian writes a check to the retiree.
The retiree then stores this money in his checking account for
a maximum of 60 days. Within these 60 days, the retiree must rollover
these savings to a new IRA account with a new broker such as Charles
Schwab. This type of a rollover is limited to once every 12 months...
(Read Full)
|
Published
on: September 29th, 2006The US Department
of Labor unveiled a Safe Harbor Plan for corporations that automatically
enroll their employees and workforce in 401k
retirement plans. US Department of Labor Secretary, Elaine
Chao, quotes "Too many workers, some overwhelmed by investment
choices or paperwork, are leaving retirement money on the table
by not signing up for their employers' defined contribution plan.
This regulation would boost retirement savings by establishing
default investments for these workers that are appropriate for
long-term savings" (Read
Full)
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The
highest tax credit that you can get on your 401k contributions
is:
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Published
on: September 26th, 2006A Blackout
Period (limited or denied access) in terms of 401k retirement
plans is an average of 60 days of the year during which plan participants
are NOT allowed to modify the structure and covenants of their
401k retirement plans. For example, if the job of 401k administrator
is being moved from one bank to another, a blackout period may
occur to easily facilitate this move. (Read
Full)
|
Published
on: September 23rd, 2006The annual pre-tax
or after-tax contributions you make towards a 401k retirement
savings plan is meant to help you have sufficient income upon
your retirement. However, there might be immediate times when
you desperately need the money, examples include huge medical
bills, death of spouse, disability, etc. If you withdraw money
from your IRA account before the age of 59 and 1/2, you will be
subject to a 10% early-distribution penalty as well as local and
federal state taxes. (Read Full)
| (Discuss
on Forum)
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Published
on: September 19th, 2006403b plans are
retirement savings plans that allow you to make annual dollar
contributions (just like 401k plans)
and let them grow tax-deferred up until you withdraw them (upon
retirement). Note the fact that 403b plans allow for pre-tax contributions
(that is from your Gross Wage). (Read
Full) | (Discuss
on Forum)
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Published
on: September 17th, 2006A study carried
out by 2 Washington DC state organizations revealed that 401k
participants who contributed payments towards their employer sponsored
401k retirement plans over the past 7 years have seen growth rates
of over 50%. This is inspite of the tech boom bust of 2000 and
market declines in 2002.. (Read
Full)
|
|
You can
borrow upto ___% of your entire retirement savings from a 401k
plan in the form of a loan:
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 Published
on: September 13th, 2006
If you fall in the category of low income
savers, you may be eligible for a tax credit of $1000 on contributions
made to 401k retirement plans, 403b plans, 457 government plans,
IRA (Individual Retirement Account) or Roth IRA. This new legislation
called the "Saver's Credit" went into effect in 2002
(thanks to the Economic Growth and Tax Relief Reconciliation Act
of 2001) and is a reduction to your Gross Income (so that you
have a less taxable income). It cannot be used as a $1000 refund
for extra cash flow... (Read Full)
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Published on: September
10th, 2006
In general, there are 8 investment options available to most 401k
plan retirees. You can diversify your portfolio into high risk
and low risk investments and this will determine your total nest
egg upon retirement. If you want a safe secured income upon retirement,
we suggest investing in low risk securities.
1) Stock Mutual Funds: Stock
mutual funds are invested in various stocks traded in the public.
The value of stock mutual funds fluctuates highly from day to
day but over a longer term, they are known to have better returns
than some of the other above investments example US Treasury Bills,
Government Bonds, etc. (Read
Full)
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Published
on: September 8th, 2006
Effects of the The Economic Growth and
Tax Relief Reconciliation Act of 2001 (EGTRRA) brings about new
reforms that allows 401k plan participants to be able to save
more for retirement now. From 2004, the maximum 401k contribution
limit increases to $13,000 and rises to $15,000 by the year 2006.
Furthermore, workers over the age of 59.5 are now allowed to make
"catch-up" contributions of $3000 more in 2004, with
this amount rising to $5000 in the year 2006... (Read
Full)
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Published on: September 5th, 2006
Pre-tax contribution is
the amount of deductions you make from your monthly gross wage
into your 401k retirement savings account, BEFORE taxes have been
deducted. By making pre-tax contributions, you are lowering your
current taxable income. For example, if you earn $10,000 per month,
and contribute 10% of it towards a 401k retirement savings account,
then your current taxable income is lowered to 90% x $10,000 =
$9000. Instead of paying taxes on the $10,000, you will be paying
taxes only on the $9000! (Read
Full)
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Published
on: September
3rd, 2006
1) What's the difference between a Roth
401k and traditional 401k pre-tax deferral plan?
In a traditional 401k plan, annual contributions are
made with pre-tax dollars (meaning BEFORE taxes have been paid).
On the other hand, a Roth 401k plan requires annual contributions
to be made with AFTER-tax dollars (after taxes have been paid).
For example, if you earn $50,00 a year: (Read
Full)
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Published
on: September
1st, 2006
If you own a small business where you are the
employee or you and your spouse manage the business, then a solo
401k self employed retirement plan is a good retirement choice.
Thanks to the Tax Relief Act of 2001, owners of self employed
or solo 401k plans have the following advantages:
1 ) 100% Contribution Choice: You can contribute
however much you want per year.
2) Higher Contribution Limit: You can contribute
more funds than any other 401k account e.g a Roth IRA, traditional
401k, etc. (Read
Full)
|
 Published
on: August 30th, 2006
Effective January 1st, 2006, employers now have
the ability to combine the retirement options provided by traditional
401k retirement plans and Roth IRA plans into one effective plan,
called simply, the Roth 401k. The Roth 401k is essentially similar
to the traditional 401k and Roth IRA plans but differs in some
ways as well. Below, we have outlined the main similarities and
differences between the three:(Read
Full)
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Published
on: August 28th, 2006
You work very hard on your job and make good pay.
You dedicate some of this pay for your retirement and can't afford
to lose it right? Well here's some good tips on how to avoid some
of the most common 401k retirement saving mistakes that could
cost you your life savings:
1) Diversify Your Investments
You probably will hear this from every financial expert.
If your employer offers one type of mutual funds to invest in,
do NOT put all your money into it. Diversify your savings into
multiple mutual funds that are yielding different returns. Do
not put all your eggs into one basket! (Read
Full)
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Published
on: August 26th, 2006
In the reforms brought about by the Growth and
Tax Relief Reconciliation Act of 2001 (EGTRRA), a new concept
called the 401k catch up contributions was introduced. 401k Catch
Up contributions allow retirement participants over the age of
50 to contribute extra payments each year ($5000 in the year 2006).
This move was done so as to encourage people to plan and start
saving money for their retirement, because its only your money
that will help you during retirement! (Read
Full)
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| |
Effects
of the The Economic Growth and Tax Relief Reconciliation Act of
2001 on 401k Plan Participants
