When calculating your taxable income for the year, you may be able to reduce the amount of income that is subject to taxes by contributing to a 401(k) plan. These contributions are taken out of your paycheck before taxes are calculated, which means that they are not included in your taxable income. For example, if … Read more
Early Withdrawal Penalties Withdrawing funds from your 401(k) before age 59½ typically results in a 10% early withdrawal penalty. This penalty is imposed by the Internal Revenue Service (IRS) in addition to any applicable income taxes. Here are some key points to consider regarding early withdrawal penalties: The penalty is calculated based on the amount … Read more
In most cases, spouses are named as the default beneficiaries of a 401(k) plan if the plan participant does not specify otherwise. This is done to protect the spouse’s financial interests in the event of the participant’s death. If the participant does not have a spouse, the beneficiary designation will typically default to the participant’s … Read more
An Indexed Universal Life (IUL) insurance policy and a 401(k) retirement plan are both financial tools that offer unique benefits. An IUL is a permanent life insurance policy that provides tax-free death benefits and the potential for cash value growth. The cash value grows on a tax-deferred basis, meaning you don’t pay taxes on the … Read more
If the dollar loses its value, the purchasing power of your 401k savings will be affected. This is because the value of the investments in your 401k, such as stocks and bonds, are denominated in dollars. As the dollar’s value decreases, the value of your investments will also decrease. This means that your 401k balance … Read more
Garnishment is the legal process of seizing part of an individual’s income to pay off debts. Traditional wages can be subject to garnishment, but the rules governing 401k accounts are different. Retirement accounts like 401ks generally receive special protections from creditors. In most cases, withdrawals made before age 59.5 are subject to income tax and … Read more
To withdraw money from your John Hancock 401k, you first need to determine your eligibility. You may be eligible to withdraw funds if you have reached the age of 59½, are experiencing financial hardship, or are leaving your job. Once you have determined your eligibility, you can initiate the withdrawal process by contacting John Hancock … Read more
If you’re deported from the United States, your 401(k) retirement savings account will generally be treated in one of two ways: 1. **IRS Withholding:** The Internal Revenue Service (IRS) may withhold 30% of your 401(k) balance to cover any unpaid taxes or debts. This withholding happens automatically upon deportation. 2. **No IRS Withholding:** If you … Read more
Calculating Required Minimum Distributions (RMDs) for 401(k) accounts is important to avoid penalties. The RMD is the minimum amount you must withdraw from your account each year once you reach age 72. Failure to withdraw the RMD can result in a penalty of 50% of the amount that should have been withdrawn. To calculate your … Read more
Withdrawing money from your 401(k) account before you reach retirement age can have financial consequences. You may have to pay income taxes on the amount you withdraw, and you may also face a 10% early withdrawal penalty. The early withdrawal penalty is a tax that is applied to the amount you withdraw from your 401(k) … Read more