I want to start out by stating that this post is not meant to knock employer retirement plans. Such plans can be a great way to get started in saving for retirement or as another source of retirement savings. However, if you do reach a point where rolling a 401(k) or other employer plan into an IRA is a real opportunity/thought, then you should strongly consider doing so. First off, if you are still working and your 401(k) isn’t a huge amount, you could save yourself some serious tax money down the road if you convert to an IRA, especially Continue reading Rolling Over to an IRA Can Give You More Investment Options
If you aren’t participating in your company’s retirement plan (i.e. a 401(k)), then you are really missing out. Not only is it a great way to save for retirement, there may be numerous perks and benefits that you may be giving up. For one, if your company offers contributing matching, you could be leaving extra money on the table. Even if the match is only a small amount–such as 3%–that’s still better than nothing and can go a long way over a long period. Being an active participant in an employer retirement plan can also potentially allow you to deduct Continue reading Are You an Active Participant in Your Employer’s Retirement Plan?
Do you want to know a little financial secret on how to avoid rollover headaches? It’s simple, don’t do them! I’m not kidding. Rollovers, especially 60-day rollovers, can be complex as there are limitations on how many you can do each year and how long you have to move the funds. If you don’t read up on the rules or track the time between when the funds are disbursed to when they must go back into an account, you and your retirement funds could be in for a world of hurt. And yes, there are ways to avoid a rollover Continue reading The Best Way to Avoid Rollover Complications
Many companies offer retirement benefits. Those benefits can range from simply offering 401(k)s to a wide range of financial resources that can include financial planning and multiple retirement account options. Furthermore, with legislation working it’s way through Congress that could allow small businesses to band together to offer retirement savings plans, more Americans could find themselves working for an employer that offers such benefits. Regardless of the size of the company you work for, if you are taking advantage of any employer offered retirement benefits, you need to make sure that you understand what those benefits entail and what their Continue reading Do You Understand Your Employer Retirement Benefits?
It may not be evident, but the gaps between the classes in American society have widened over the past decade. The rich have gotten richer, while the middle class and lower classes have struggled to improve their lots. Meanwhile, costs of living have gone up, and along with that, the amount needed to live a comfortable life in retirement. On top of all this, the Baby Boomer generation–one of the largest segments of our country–has aged and started to retire, placing a strain on the resources that once were considered hallmarks of retirement. Things such as Social Security and pensions Continue reading Retirement Benefits May Become a Requirement in the Future
Just because you are taking advantage of your employer plan’s “still working” exception doesn’t mean you won’t eventually want to tap into your nest egg. Sure, you may delay it for a few years, but that doesn’t mean you won’t still want to take distributions–or roll it over to an IRA–while you are still working. If you decide to do a rollover, you need to be careful that you do not have to take a required minimum distribution (RMD) for the year. If you do have an RMD, you will have to take that RMD before you do the rollover. Continue reading Don’t Forget About RMDs Before a Rollover
There is obviously more than one way to save for retirement. There are different strategies and accounts that you can use when building up your nest egg. Chances are, you probably have more than one retirement account. Those odds increase if you’ve worked at more than one company throughout your career or if you’ve inherited a retirement account from a relative. While I’ve mentioned on here the efficiency of streamlining your retirement accounts (i.e. converting or rolling over accounts), that doesn’t mean that you have to have only one retirement account. In fact, it’s probably a good thing that you Continue reading Diversify Your Retirement Accounts
No, this post is not going to mathematically break down how taxes will affect your retirement savings when you are contributing to a employer retirement plan and your contribution is being matched by your employer. That’s too confusing and will vary from person to person as not everyone makes the same amount of money. What I do intend to do, though, is to get you thinking about how taxes may impact your retirement savings if you are using an employer plan (i.e. a 401(k) or a 403(b) plan). These plans can be a great way to save for retirement, especially Continue reading Taxes and Your Employer Retirement Plan(s)
Aggregating required minimum distributions (RMDs) can be an efficient way to take your yearly RMD when you have multiple retirement accounts. However, you need to make sure you understand how aggregation works. One of the easiest ways to trip up when it comes to aggregation is to not know that only traditional IRA RMDs can be aggregated. Unfortunately, employer plans–such as a 401(k)–cannot be aggregated and RMDs from those plans must be taken separately if you have multiple retirement accounts. In other words, you can’t lump together an RMD from a traditional IRA and that of an employer plan and Continue reading Make Sure You Understand Aggregation
The rules surrounding retirement saving plans can be confusing, to say the least, and it can be easy to run afoul of the various rules for IRAs and 401(k)s. With so many rules, people can be hesitant about having multiple accounts. Don’t let that complexity scare you. You can have both an IRA and a 401(k)–or other employer account–at the same time and make independent contributions to them. Thus, you can save as much as you want into your 401(k) and still make the maximum contribution to your IRA each year. Where things get tricky is with you taxes. If Continue reading Not One or the Other: You Can Contribute to Both an IRA and 401(k)