An annuity is a financial product that pays out regular income payments for a specified period or for the rest of your life. Annuities can be used to supplement your retirement income or to guarantee a steady stream of income in your later years. A 401k is a retirement savings plan offered by many employers. … Read more
A good rate of return for a 401k will vary based on individual factors such as age, risk tolerance, and investment goals. However, a general benchmark for a good long-term return is around 7%. This rate of return has historically outpaced inflation and allowed investors to grow their retirement savings. It’s important to note that … Read more
An IRA (Individual Retirement Arrangement) and 401(k) plan are both tax-advantaged retirement savings accounts. However, there are some key differences between the two. IRAs are available to individuals regardless of their employment status, while 401(k) plans are only available to employees of companies that offer them. IRAs are funded with after-tax dollars, while 401(k) plans … Read more
A pension is a retirement plan offered by many employers that provides a fixed income stream for life after you retire. Pensions are typically funded by both the employer and the employee, and the amount of money you receive each month will depend on factors such as your salary, years of service, and the terms … Read more
Rolling over a 401(k) means moving the money in your employer’s retirement plan into another type of retirement account, like an IRA. This can be a good option if you’re leaving your job, want more investment options, or need to consolidate your retirement savings. There are two main types of rollovers: direct and indirect. In … Read more
IRAs and 401(k)s are both retirement savings accounts that offer tax benefits. With an IRA, you contribute after-tax dollars, and your earnings grow tax-free until you withdraw them in retirement. Withdrawals are taxed as ordinary income. With a 401(k), you contribute pre-tax dollars, which reduces your current taxable income. Your earnings grow tax-free, and withdrawals … Read more
Reaching the age of 59½ without being considered a retired participant allows you to withdraw funds from your 401(k) without facing an early withdrawal penalty. This penalty, typically 10% of the amount withdrawn, is imposed by the Internal Revenue Service (IRS) to discourage early withdrawals from retirement accounts. However, the IRS waives the penalty for … Read more
The percentage of your income that you contribute to your 401(k) is a personal decision that depends on several factors, including your financial goals, retirement age, and your other savings and investments. There is no one-size-fits-all answer, but as a general rule, many financial experts recommend contributing at least 10-15% of your income to your … Read more
An RMD, or Required Minimum Distribution, is a specific amount of money that must be withdrawn from a retirement account, such as a 401(k), each year starting at age 72. The RMD is calculated based on the account balance as of the end of the previous year and a life expectancy factor determined by the … Read more
When it comes to 401(k) contributions, determining the ideal percentage to set aside can be a personal decision influenced by factors like financial goals, risk tolerance, and income level. A common recommendation is to aim for a savings rate of 10-15% of your pre-tax income. However, it’s important to consider your individual circumstances and adjust … Read more