Individuals can establish and contribute to a 401(k) plan even without an employer-sponsored program. This option, known as a self-directed 401(k), allows them to set up a retirement account individually. The process involves choosing a financial institution that offers self-directed 401(k)s, creating an account, and making contributions directly from their income or savings. Self-directed 401(k)s … Read more
Investing your 401(k) can be a great way to build retirement savings. It’s a tax-advantaged account, meaning that you don’t pay taxes on the money you contribute or the earnings until you withdraw it in retirement. There are different types of investments you can choose from within your 401(k), such as stocks, bonds, and mutual … Read more
An IRA and a 401(k) can serve as complementary retirement savings options, allowing individuals to maximize their tax benefits and long-term savings potential. While both accounts offer tax-deferred growth, they differ in terms of employer contributions, contribution limits, and withdrawal rules. Combining an IRA with a 401(k) can provide a balanced approach to retirement planning, … Read more
Negotiating a 401(k) match can be a valuable strategy for increasing your retirement savings. Many employers offer matching contributions, where they contribute a certain amount to your 401(k) plan for every dollar you contribute. The maximum 401(k) match allowed in 2023 is $6,500, so negotiating a higher match can significantly boost your retirement savings. Before … Read more
Rolling over a 401k to a 529 plan allows you to transfer retirement savings into a tax-advantaged education savings account. By doing so, you can potentially lower your tax burden and potentially increase your child’s educational funds. Earnings in a 529 plan grow tax-free and withdrawals used for qualified education expenses are not subject to … Read more
Traditional individual retirement accounts (IRAs) and 401(k) plans are retirement savings accounts that offer tax advantages. IRAs are available to individuals and can be opened at banks, brokerages, or other financial institutions. Contributions to traditional IRAs are tax-deductible, meaning they reduce your taxable income for the year. Earnings in the account grow tax-deferred, meaning you … Read more
If you have a 401k from a previous employer, you might be wondering if you can move the money into an IRA. The answer is yes, you can roll over a 401k to an IRA. This is a common way to keep your retirement savings on track, even if you’re no longer working for the … Read more
**Can You Have Both 401(k) and IRA?** Yes, it is possible to have both a 401(k) and an individual retirement account (IRA). These two retirement savings plans offer different advantages and drawbacks, so it’s important to understand how they work before deciding which one is right for you. **401(k) Plans** 401(k) plans are employer-sponsored retirement … Read more
A Simplified Employee Pension (SEP) and a 401(k) plan are both retirement savings vehicles that allow individuals to save for their future. A SEP is an employer-sponsored plan that is available to self-employed individuals and small businesses. Employees can contribute to the plan on a pre-tax basis, up to a certain limit each year. A … Read more
401(k) plans are retirement savings accounts offered by employers. They allow employees to save money on a pre-tax basis, which reduces their current income taxes. The money in a 401(k) plan is invested and grows tax-free until it is withdrawn. Generally, individuals cannot withdraw money from their 401(k) plans without incurring a penalty until they … Read more