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
When investing in a 401(k) plan, you are not able to deduct any losses. Rather, contributions to a 401(k) are made with pre-tax dollars, meaning that you reduce your current taxable income by the amount you contribute. As such, if the value of your 401(k) investments decreases, you will not be able to claim a … Read more
Early withdrawal from a 401(k) plan can result in penalties and taxes, depending on your age and situation. If you’re under 59½, you’ll typically pay a 10% early withdrawal penalty on top of any applicable income taxes. However, there are some exceptions to this rule, such as withdrawals for qualified expenses like medical expenses, higher … Read more