Category: 401K
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Take Advantage of Catch-Up Contributions
If you’re over 50 by the end of the calendar year, you’re eligible to make catch-up contributions to accounts like your 401k and IRAs. For 401ks in 2007, that means each year you can contribute up to $20,500, $5k more than under 50 folks. For IRAs in 2007, that means each year you can contribute…
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Roth 401k vs. Regular 401k
The Roth 401k was made permanent with the passing of the Pension Protection Act of 2006 last year, though it has been around since 2001, and it does for 401k plans what the Roth IRA did for Traditional IRA plans – it created a vehicle for folks to save after-tax dollars and allow it to…
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401k Revenue Sharing Controversy
There are two big points in a recent article in Kiplinger.com on the topic of hidden 401k fees. The first is the issue of “revenue sharing” between a 401k fund choice and the 401k’s plan administrators. Apparently what happens is that large investment companies are essentially offering a “kickback” to a plan administrator if they…
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10 Retirement Resolutions: Max Out Your 401(k)
US News and World Report had a little piece where they discussed some good New Year’s resolutions related to retirement and I thought that I’d put each of them through their paces. The second retirement resolution was to max out your contributions to your 401(k). “I try to fund all the retirement accounts I can…
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Roth vs. 401K
My Roth and 401K strategy is to contribute to your 401K until you get your company match, then contribute the maximum to your Roth IRA, then contribute the maximum to your 401K. How does this compare to Walter Updegrave, a Money Magazine senior editor, and his Roth and 401K strategy? It’s exactly the same as…
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Withdraw From Tax Deferred Accounts Last
When it comes time to begin taking disbursements from your retirement accounts, try to take them from your tax deferred or tax free accounts last (401k’s, Roth and Traditional IRAs) because you want them to grow tax-free as long as possible. If you opt to retire before 70.5, the age at which mandatory disbursements begin,…
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Highly Compensated Retirement Contribution Options
When you’re a “highly compensated employee,” you’re limited in how much you’re allowed to contribute to your 401(k). You are limited because the government wants the playing field to be level and it’s “unfair” to lower compensated employees if more highly compensated employees contributions outstrip the percentage for the lower compensated employees. Whether or not…
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Name Your IRA Beneficiary
It is critically important that you properly name your IRA beneficiary because, in the event of your demise (which will hopefully happen very far into the future), the tax ramifications change based on who you name as your beneficiary. Usually, your spouse, if you have one, will be able to inherit your IRA without any…