June 27, 2026

The Internal Revenue Service (IRS) sets limits on how much you can contribute to your 401(k) retirement account each year. These limits are designed to ensure that people don’t put too much money into their 401(k)s and avoid paying taxes on those funds. The IRS limits are updated each year to keep pace with inflation. For 2023, the limit for employee contributions to a 401(k) is $22,500. For employees who are age 50 or older, there is an additional catch-up contribution limit of $7,500, making the total limit $30,000. Employers can also make contributions to their employees’ 401(k)s. The limit … Read more

June 27, 2026

What is a Good Expense Ratio for a 401k

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Expense ratios are fees charged by 401k plans to cover administrative costs, and they can affect the overall returns on your investments. A good expense ratio is generally considered to be around 1% or less. This means that for every $1,000 invested, you would pay $10 or less in fees. While some plans may have lower expense ratios, it’s important to consider the overall investment options and services offered by the plan before making a decision based solely on expense ratios. A slightly higher expense ratio may be justified if the plan offers a wider range of investment choices or … Read more

June 26, 2026

Can I Change My 401k Contribution Anytime

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You can generally adjust your 401(k) contributions at any time. Most employers allow you to change your contribution amount, frequency, or investment choices through an online portal or by contacting the plan administrator. However, some plans may have restrictions on how often you can make changes, such as limiting adjustments to once per month or quarter. If you’re not sure about the specific rules for your 401(k) plan, check with your employer or plan provider. Frequency of 401k Contributions The frequency of your 401k contributions depends on your employer’s plan. Some plans allow you to make contributions on a monthly, … Read more

June 25, 2026

How to Avoid Penalty for 401k Withdrawal

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If you’re planning to tap into your 401(k) savings before age 59½, be aware that you’ll face a 10% penalty on the amount you withdraw. However, there are some exceptions to this rule. One is if you’re using the money to pay for qualified education expenses, such as tuition, fees, and books. Another exception is if you’re using the money to buy your first home. You may also be able to avoid the penalty if you’re withdrawing the money because you’re disabled or have experienced a financial hardship. It’s important to note that these exceptions are complex and there are … Read more

June 25, 2026

Is the Tsp a 401k

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TSP, or Thrift Savings Plan, is not a 401(k). It’s a retirement savings plan for federal employees and members of the uniformed services. TSP is similar to a 401(k) in that you can contribute pre-tax dollars, and your earnings grow tax-deferred. However, there are some key differences between the two plans. For example, TSP contributions are not subject to the same annual contribution limits as 401(k)s. Furthermore, you can only invest in TSP funds, whereas you can invest in a wider variety of investments with a 401(k). Thrift Savings Plan (TSP) Overview The Thrift Savings Plan (TSP) is a retirement … Read more

June 25, 2026

What Does Safe Harbor Mean 401k

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A 401(k) plan is a retirement savings and investment plan offered by employers in the United States. It allows employees to save a portion of their paycheck on a pre-tax basis, which reduces their current taxable income. The funds are invested in a variety of options, such as stocks, bonds, and mutual funds, and grow tax-free until withdrawn in retirement. Withdrawals made before age 59½ may be subject to a 10% early withdrawal penalty, and all withdrawals are subject to income tax. There are two main types of 401(k) plans: traditional and Roth. With a traditional 401(k), contributions are made … Read more