Whether IRA contributions are tax-deductible if you have a 401k depends on your income and filing status. Generally, if you meet certain income limits, you can deduct your IRA contributions from your taxable income. However, if you participate in an employer-sponsored retirement plan like a 401k, the deductibility of your IRA contributions may be reduced … Read more
Considering rolling your 401k into an IRA? It’s important to weigh the pros and cons. IRAs offer more investment options and flexibility, but may have higher fees. 401ks often have lower fees and employer matching contributions, but may have limited investment choices. If you’re seeking more control over your investments and are willing to pay … Read more
To find a forgotten 401(k), start by contacting previous employers to inquire about any retirement plans you may have had. Provide them with your name, Social Security number, and dates of employment. Check with the National Registry of Unclaimed Retirement Benefits (NURUB) to search for unclaimed 401(k) accounts. Visit the website www.missingmoney.com, an initiative of … Read more
When a layoff occurs, the future of your 401(k) depends on your circumstances and the plan’s rules. You generally have four options: leave the money in the plan, roll it over to an IRA or new employer’s plan, take a lump-sum withdrawal, or take a loan against the account. Leaving the money in the plan … Read more
If you withdraw funds from your 401(k) account before reaching age 59½, you may be subject to a 10% early withdrawal penalty tax on the amount withdrawn. This penalty is in addition to any income taxes you may owe on the withdrawal. The 10% penalty is imposed by the Internal Revenue Service (IRS) and applies … Read more
Losing your job can be stressful, especially if you rely on your 401(k) for retirement savings. Fortunately, you have options if you get fired. You can leave the money in your 401(k), roll it over into an individual retirement account (IRA), or take a withdrawal. Each option has its own benefits and drawbacks. If you … Read more
Borrowing against your 401k can be an option if you need access to funds. However, it’s important to understand the potential risks and consequences before you make a decision. Typically, you can borrow up to half of your vested account balance, or $50,000, whichever is less. The repayment period is usually five years, and you’ll … Read more
Generally, you can withdraw money from your 401(k) penalty-free after you reach age 59½. However, there are some exceptions. You can also withdraw funds without penalty if you leave your job and are age 55 or older, if you become disabled, or if you need the money to pay for certain qualified medical expenses or … Read more
Contributing to a Roth 401(k) has a unique tax-saving feature compared to traditional 401(k) contributions. While traditional 401(k) contributions are made pre-tax, reducing your current taxable income, Roth 401(k) contributions are made after-tax, meaning they don’t affect your current tax bill. However, the significant advantage comes in retirement. Unlike traditional 401(k) withdrawals, qualified Roth 401(k) … Read more
Contributions to a 401k retirement plan are typically deducted from your paycheck before taxes are calculated. This means that the money you contribute to your 401k reduces your taxable income, potentially lowering your tax bill for the year. You will not pay taxes on these contributions until you withdraw them from your 401k account in … Read more