401K Financial Advisors

If you're searching the net for 401K Financial Advisors help, you're definitely at the right place! This webpage is full of advice and explanations on how 401k's work plus there are all kinds of tips, tricks and most asked questions you can check out and review. We hope you find this page to be helpful and informative for you! Choosing the right retirement program can be a bit overwhelming if you don't know what to look for, so we've set this page up with as much 401 k information as we could get for you and made sure it's fast, easy and helpful to you. Here you go...

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Good reason to use a 401k for your investing:

There are many advantages to saving for retirement through your workplace retirement savings plan, including a potential match from your company, as well as professional management of your investments. The best reason to save in your plan is plain and simple: it's up to you to save and invest for your own future.

Here are seven more reasons:

* You can increase your take home pay, really
* A company match can help your investments grow
* Automatic payroll deduction makes it easy to save
* Most of your plan's investment choices are managed by professionals
* Most plans allow access to your contributions in an emergency
* Account services keep you informed
* Your money can go with you, job to job

401K Financial Advisors Tips:

Can I withdraw just my after-tax contributions and not the earnings, so I won't have to pay taxes?

Generally speaking, any withdrawal of after-tax dollars from your account must be made up of both contributions and earnings (if any), as stated in the Tax Reform Act of 1986. Contributions made before 1987 were "grandfathered" by this act. This means that participants (whose pre-1987 after-tax accounts are accounted for separately) are still able to withdraw pre-1987 contributions only, and not any of the earnings, without tax implications. Of course, all withdrawals are subject to the provisions of your plan. Please refer to the plan document or check with the plan administrator.

Terms You Should Know:

Service Requirement: The service requirement is the minimum amount of time that an employee must work for you, before he is eligible to participate in the plan.

Highly-Compensated Employee: For Tax Year 2000, highly-compensated employees are defined by the IRS as persons who own 5% or more of the company and/or earn more than $170,000 annually, and/or earn more than $85,000 annually and are in the top 20% of the company, ranked by pay.

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401k Rule:

401k Rules Regarding Contribution:

* In 2005, the cap for individual contribution was $14,000.This number increased to $15,000 in 2006, and after 2006, the cap adjusts annually in $500 increments.
* The maximum total amount contributed to your 401k plan is the lesser of 100% compensation or $42,000.
* If you’ll be age 50 or older by the end of theyear, you may make an additional “catch-up”contribution each year. The maximum “catch-up”contribution was $4,000 in 2005 and $5,000 in 2006 and increases each year.
* For highly compensated employees (those with income inexcess of $95,000 in 2005), they may not be allowed to contribute atthe maximum rate in the company.
* You can only contribute money to your 401k plan by automatic payroll deduction.
* You may not get your employer’s match if you leave your employer in less than three years. However, more and more companies have began offering immediate vesting to their employees

What is a 401(k)?

A 401(k) is a type of retirement plan that allows employees to save and invest for their own retirement. Through a 401(k), you can authorize your employer to deduct a certain amount of money from your paycheck before taxes are calculated, and to invest it in the 401(k) plan. Your money is invested in investment options that you choose from the ones offered through your company's plan. The federal government established the 401(k) in 1981 with special tax advantages, to encourage people to prepare for retirement. They get their catchy name from the section of the Internal Revenue Code which established them (you guessed it, section 401(k)).

**Disclaimer** The information on this page is as accurate as we could get it but is meant for information purpose only. It's not meant to be legal advice in which you use to make financial decisions. For any legal or financial matters, you should seek out a certified 401k or investment company or individual.

Other words associated with this page and topic would be: Maximum Amount To 401K, pension, or My Own 401K