. Self-Employed Retirement Savings Options As a self-employed individual, you have several retirement savings options to consider. Two popular choices are the Simplified Employee Pension (SEP) IRA and the 401(k) plan. SEP IRA A SEP IRA is a simplified retirement savings plan designed for self-employed individuals and small businesses. It offers the following benefits: Tax-deductible … Read more
Individuals and employers can contribute to a 401(k) plan up to a set limit each year. This limit is adjusted annually to keep pace with inflation. For 2023, the contribution limit for participants under age 50 is $22,500, with an additional catch-up contribution limit of $7,500 for those who are age 50 or older. Employers … Read more
A 401(k) and an IRA are both retirement savings accounts. A 401(k) is sponsored by an employer, while an IRA is an individual account. You can roll over funds from an IRA into a 401(k) if you meet certain requirements. The requirements include being eligible to participate in the 401(k) plan and not having outstanding … Read more
Withdrawing funds from your 401(k) before reaching retirement age typically comes with penalties. However, there are certain circumstances that allow for early withdrawal without triggering a 10% penalty, including: financial hardship, disability, or using the funds for qualified education expenses. To request an early withdrawal, you’ll need to contact your plan administrator and submit appropriate … Read more
You can start withdrawing money from your 401(k) when you’re 59 1/2 years old without paying a 10% penalty. If you withdraw money before that age, you will have to pay income tax on the amount withdrawn as well as a 10% penalty. There are some exceptions to this rule, such as if you become … Read more
Employer matching contributions to a 401(k) plan are generally excluded from the annual contribution limit. This means that you can contribute more to your 401(k) each year if your employer offers a match. The annual contribution limit for 2023 is $22,500 ($30,000 if you are age 50 or older). However, the limit does not include … Read more
When you get laid off, your 401(k) account is typically frozen, meaning you can’t make any further contributions or withdrawals. The money in your account will continue to grow or decline based on market performance. You have several options for what to do with your 401(k) funds: leave it in the plan, roll it over … Read more
Rolling over a 401(k) to an IRA involves transferring your retirement savings from an employer-sponsored plan to an individual retirement account. Here’s how to do it: Contact the administrator of both your 401(k) and your chosen IRA. Provide them with your account information and request the rollover. The 401(k) administrator will process your request and … Read more
Loans taken from a 401(k) retirement account are not typically reported to credit bureaus and therefore do not appear on an individual’s credit report. This is because 401(k) loans are considered withdrawals from the account rather than credit obligations. However, if a 401(k) loan is not repaid, it may be reported as a distribution on … Read more
When you are fired, the availability of your 401(k) account depends on the specifics of your employer’s plan and your situation. Generally, you have the option to keep your account and continue managing it, even if you are no longer employed. You may also have the choice to withdraw funds or roll them over into … Read more