In the United States, both spouses can contribute to their respective 401(k) retirement accounts. Each spouse can contribute up to the annual limit set by the Internal Revenue Service (IRS). This allows couples to maximize their tax-deferred savings. However, it’s important to note that the contribution limits are per person, not per household. So, even … Read more
Vesting refers to the process where you gradually gain ownership of your employer’s contributions to your 401k plan. It’s expressed as a percentage, and it typically starts at 0% when you first start working and increases over time. For example, you may become 20% vested after one year of service, meaning you own 20% of … Read more
If you lose a loved one who had a 401(k) retirement account, you may be wondering if you can inherit it. The answer is yes, but the process can vary depending on the type of 401(k) account and the beneficiary designations. Generally, there are two ways to inherit a 401(k): as a spouse or as … Read more
Transferring funds from a 401k to a 403b is generally possible and can offer certain advantages. 403b plans are retirement savings plans specifically designed for employees of public schools and certain other tax-exempt organizations. Unlike 401k plans, which are primarily offered by private sector employers, 403b plans provide similar tax benefits but may have different … Read more
To withdraw from your Empower 401k, you can either call their customer service line or follow the steps for an online withdrawal. To withdraw online, log in to your Empower account, navigate to the Withdrawals tab, select the type of withdrawal you want to make, enter the amount you want to withdraw, and choose how … Read more
When considering Medicaid eligibility, understanding if assets are exempt is crucial. A 401(k) is a retirement savings plan that offers tax advantages. In most cases, 401(k) plans are considered exempt assets under Medicaid. This means they are not counted when determining eligibility for Medicaid benefits. The funds held in a 401(k) account are protected from … Read more
To prove disability for 401k withdrawal, you’ll need to provide documentation from a qualified medical professional. This documentation can include a diagnosis from a doctor or licensed mental health professional, as well as supporting evidence such as medical records, prescription information, or treatment plans. The documentation should clearly state that you have a disability that … Read more
Deferred Vested Benefits and 401k plans are both retirement savings accounts, but they have key differences. Deferred Vested Benefits are employer-funded plans where the employee has a vested right to some or all of the employer’s contributions after a certain period of service. In a 401k plan, the employee makes contributions from their paycheck, and … Read more
Withdrawing from a 401(k) plan before age 59½ typically incurs a 10% early withdrawal penalty, in addition to income tax on the amount withdrawn. There are a few exceptions to this rule, such as withdrawals for medical expenses, education costs, or a first-time home purchase. It’s important to carefully consider the potential financial implications of … Read more
A “catch-up” contribution provision is a specific rule that allows older individuals to contribute more money to their 401(k) plans each year than younger individuals. This provision was created to help older workers save more for retirement, as they may have less time to do so. The catch-up contribution limit for 2023 is $7,500, in … Read more