Safe Harbor Rules 401K

If you're tired of poking around for Safe Harbor Rules 401K information, you've surely found the right spot! This webpage is full of advice and explanations on how 401k's work plus there are all kinds of tips, tricks and FAQ's you can go over and hopefully learn from. 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 painless and easy. Here you go...

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Do you wonder if 401k's are a smart idea?

Your money can go with you, job to job

One of the reasons why plans like 401(k)s have become so popular is that they are portable: generally speaking, you can take them from job to job (with some exceptions). If you decide to change jobs, you have three options for your contributions: You can roll your eligible rollover assets to and from 401(k), 403(b) and governmental 457(b) plans, provided your new employer's plan accepts these rollovers.

Safe Harbor Rules 401K Tips:

Let's cover the IRS limits. First, a person's maximum before-tax contribution (i.e., 401(k) limit) for 2005 is $14,000. It's important to understand this limit. This figure indicates only the maximum amount that the employee can contribute from his/her pre-tax earnings to all of his/her 401(k) accounts. It does not include any matching funds that the employer might graciously throw in. Further, this figure is not reduced by monies contributed towards many other plans (e.g., an IRA). And, if you work for two or more employers during the year, then you have the responsibility to make sure you contribute no more than that year's limit between the two or more employers' 401k plans. If the employee "accidentally" contributes more than the pre-tax limit towards his or her 401(k) account, the employee must contact the employer. The excess might be refunded, or might be reclassified as an after-tax contribution.

Glossary & Terms:

Mutual Fund: A collection of money invested in a group of assets and managed by an investment company (a mutual fund company or other). The money comes from investors who want to buy shares in the fund. The benefits to investors in buying shares of mutual funds come primarily from diversification, professional money management, and capital gains and dividend reinvestment.

Foreign Stock Fund: Funds that invest primarily in equity securities of issuers located outside of the United States.

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Important Rules about 401k's:

General Distribution Rules:
Required distributions. A 401(k) plan must provide that each participant will either:

*Receive his or her entire interest (benefits) in the plan by the required beginning date (defined below), or
*Begin receiving regular periodic distributions by the required beginning date in annual amounts calculated to distribute the participant's entire interest (benefits) over his or her life expectancy or over the joint life expectancy of the participant and the designated beneficiary (or over a shorter period).

These required distribution rules apply individually to each qualified plan. The required distribution from a 401(k) plan cannot be satisfied by making a distribution from another plan. The plan document must provide that these rules override any inconsistent distribution options previously offered.

What makes a good 401 k?

Since your 401k plan is one of your most important retirement savings vehicles, you want it to be as good as
possible. Here are the features that we think make a really good 401k plan.

-Immediate eligibility
-Valued daily
-Generous Employer match
-Maximum contribution can be made each year, i.e., the plan places no restrictions on the amount
-Low expenses or the plan sponsor pays most fees
-Both internet and voice access for checking performance, balance, making changes, etc.
-Name brand no-load mutual funds as investment options are offered
-At least 12 investment options available, including both passive (index) and active investment (actively managed) funds
-Loans and hardship withdrawals available
-Newsletters, fund prospectus, investment performance information and some type of education seminar and/or advice product
offered.

**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: 401K Maximum Yearly, annuities, or 401K Max