Contributions to a 401(k) plan can be either pre-tax or post-tax. Pre-tax contributions are deducted from your paycheck before taxes are taken out, reducing your taxable income. Post-tax contributions are made with after-tax dollars, so they do not reduce your taxable income. Whether or not your 401(k) contributions are tax deductible depends on the type … Read more
Emptying your 401k before a divorce can have serious financial consequences. While it may seem like a quick way to access cash, it’s important to understand the potential risks. Withdrawing funds from your 401k early may result in hefty tax penalties and fees, reducing the amount of money you actually receive. Additionally, you may lose … Read more
Guideline is a 401(k) provider that offers a variety of features and benefits to its customers. One of the standout features of Guideline is its low fees. The company charges a flat annual fee of $30, which is significantly lower than the fees charged by many other 401(k) providers. Guideline also offers a user-friendly online … Read more
Switching your 401(k) to a new employer-sponsored plan with Fidelity is a simple process. Initiate the transfer by completing a transfer of assets form with both your current and new plan providers. Fidelity will handle the rest, guiding you through the steps to ensure a smooth transition of your retirement funds. It’s important to review … Read more
Paying off a 401(k) loan early with Fidelity is typically beneficial because you can save money on interest charges and reduce the impact on your retirement savings. To do so, you’ll need to: gather necessary information like your loan balance and payment details; contact Fidelity’s customer service to confirm the process; make additional payments beyond … Read more
You may be able to use your 401(k) to buy a house, but there are specific rules and limitations to keep in mind. You can borrow up to 50% of your vested account balance, or $50,000, whichever is less. The loan must be repaid within five years, and you must continue to make regular contributions … Read more
To avoid penalties on your 401k, it’s crucial to understand the withdrawal rules. Generally, if you’re under age 59½ and withdraw funds from your 401k before the end of the year in which you turn 59½, you may face a 10% penalty tax in addition to income tax on the withdrawal. However, there are some … Read more
When facing financial hardship, you may be eligible to withdraw funds from your 401(k) retirement account penalty-free. Hardship withdrawals are allowed for certain circumstances, such as medical expenses, tuition costs, or to prevent foreclosure or eviction from your primary residence. To qualify, you must show that you have an immediate and heavy financial need, and … Read more
As you approach 40, your 401(k) should generally become less aggressive to account for the closer proximity to retirement. The optimal asset allocation depends on your individual circumstances, risk tolerance, and investment goals. A good rule of thumb is to gradually shift a portion of your portfolio towards more conservative investments such as bonds as … Read more
: You can convert your pre-tax 401k or traditional IRA funds to a Roth IRA, potentially offering several benefits. Roth IRAs grow tax-free, meaning qualified withdrawals in retirement are not taxed again. However, this conversion, also known as a rollover, is subject to income tax and potentially a 10% early withdrawal penalty if you’re under … Read more