Funding Your Retirement: The 401K and 403B Way
Saving for your retirement doesn't have to be a nightmare as long as you are aware of your options. For now, we're focusing on 401K and 403B retirement plans. These two plans are essentially the same except that for-profit companies use 401Ks and non-profit companies, such as the government, use 403Bs.An employee contributes to a 401K plan with pretax salary. This means that this account appreciates without taxation until you retire or leave the company. So, 401K contributions are not included in your reported income.In essence, you receive an immediate tax deduction for your contribution.Many employees offer an automatic payroll deduction, so there isn't any extra effort involved for you.
Matching contributions or partial matching contributions are other incentives offered by employers. For instance, my employer matches every one of my dollars with a quarter. Sounds like small potatoes, but remember the beauty of compound interest.Of course, there are rules and regulations. You are typically limited to a percentage of your income or $10,500 annually, whichever is less. So what happens if you leave your company? You have 3 options: leave it as it is, roll it over into another tax-deferred retirement account such as an IRA or withdraw it all.
However, early withdrawal penalties, that is before age 59-1/2, are stiff. Usually, it's a 10% penalty plus any taxes owed. So, if at all possible avoid withdrawing any funds before age 59-1/2.Your 401K portfolio should be chosen carefully, weighing age and risk factors. The older you are, the less stock you should have in your portfolio. Many financial advisors suggest that your portfolio percentage of stocks should be your age subtracted from 100.
Therefore, a 25-year-old' s portfolio should consist of 75% stocks. However, if you're not comfortable with that level of risk, then simply chose fewer stocks. Do remember this: over the last century the stock market has returned an average of 11% (this includes all wars and the Great Depression). Your plan will most likely offer 4 to 7 investment options of mutual funds, stocks, bonds, etc. for your portfolio.
My company provides 10 options of which I have chosen 5.Chose wisely and consider how much risk you are willing to take. Most of all, you need to be comfortable with your choices. If you need further assistance in choosing your investment options, check out www.morningstar.com or the MorningStar books at your local library..
Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
In addition to its wealth of educational material, www.iraplus.com offers the ability to select and open an account with one of Entrust's nationwide local offices. Opening an account could not be simpler. All the necessary forms are available online together with detailed, yet easy-to-follow instructions. And both customers and non-customers may access the local and national event calendars, newsletters and questions and answer board."As we continue to grow the website allows us to continually share our resources, experience and expertise with an ever expanding audience of smart investors who want to take control of their investments," commented Hubert Bromma, President and CEO of Entrust.
Lisa Moren, Marketing Director for Entrust added,
"The expansion of our CE courses for real estate professionals, CPA and CFPs has allowed us to educate the industry in the use of Entrusts World of Choices?.
"Visitors also...
Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
Ira > Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
Ohio PR Veteran Establishes Pecchia Communications
CANFIELD, Ohio (ContentDesk) Nov. 11, 2005 -- Dan Pecchia, a 24-year veteran of Ohio's public relations and news circles, today announced the establishment of Pecchia Communications, a business writing and PR firm.The new firm will serve challenging writing and PR needs of companies and marketing agencies.
Pecchia Communications maintains a website at www.pecchiacomm.com.
"Today's business climate puts a premium on fast, precise and efficient communications," Pecchia said.
"Our practice is set up to serve this growing need."Pecchia had worked for seven years at Innis Maggiore, a Canton-based marketing agency, most recently as a vice president and one of its five managing principals.
Prior to that, he was with Ira Thomas Associates in Youngstown for six years, most recently as director of editorial services.Previously, Pecchia served four years as business editor of The Vindicator, Youngstown, Ohio, a daily newspaper serving northeastern Ohio and western...
Ohio PR Veteran Establishes Pecchia Communications
Ira > Ohio PR Veteran Establishes Pecchia Communications
Funding Your Retirement: The 401K and 403B Way
Saving for your retirement doesn't have to be a nightmare as long as you are aware of your options. For now, we're focusing on 401K and 403B retirement plans. These two plans are essentially the same except that for-profit companies use 401Ks and non-profit companies, such as the government, use 403Bs.An employee contributes to a 401K plan with pretax salary. This means that this account appreciates without taxation until you retire or leave the company. So, 401K contributions are not included in your reported income.In essence, you receive an immediate tax deduction for your contribution.Many employees offer an automatic payroll deduction, so there isn't any extra effort involved for you.
Matching contributions or partial matching contributions are other incentives offered by employers. For instance, my employer matches every one of my dollars with a quarter. Sounds like small potatoes, but remember the beauty of compound interest.Of course, there are rules and regulations. You...
Funding Your Retirement: The 401K and 403B Way
Ira > Funding Your Retirement: The 401K and 403B Way
Want to Loosen Uncle Sam's Grip on Your Wallet?
Talking About MoneyWith Jim Larranaga(ARA) - The average person pays more than $6,000 in federal income tax, according to the Congressional Budget Office. If you cringe at sending a big chunk of change like that to Uncle Sam, you may be looking for ways to keep a little more jingle in your pocket. I'll give you some tips, but, like me, you should consult a tax advisor before taking steps that could affect your tax status.Maximize deductionsGive to charity. Support your favorite cause or clean out the attic and donate items you don't want to charity. Be sure to get a receipt for donations exceeding $250.Deduct qualified medical expenses.
Consider scheduling elective medical and dental procedures if you think your bills will pass the threshold for deducting medical expenses (7.5% of your adjusted gross income). Don't forget, long-term care insurance premiums may qualify for the deduction.Add up miscellaneous expenses. These and many other costs may be deductible if they exceed 2...
Want to Loosen Uncle Sam's Grip on Your Wallet?
Ira > Want to Loosen Uncle Sam's Grip on Your Wallet?
401k Plan Loans - An Overview
Allowing loans within a 401k plan is allowed by law, but an employer is not required to do so. Many small business just can't afford the high cost of adding this feature to their plan. Even so, loans are a feature of most 401k plans. If offered, an employer must adhere to some very strict and detailed guidelines on making and administering them. The statutes governing plan loans place no specific restrictions on what the need or use will be for loans, except that the loans must be reasonably available to all participants.
But an employer can restrict the reasons for loans. Many only allow them for the following reasons: (1) to pay education expenses for yourself, spouse, or child; (2) to prevent eviction from your home; (3) to pay un-reimbursed medical expenses; or (4) to buy a first-time residence. The loan must be paid back over five years, although this can be extended for a home purchase. Usually the participant is allowed to borrow up to 50% of their vested account balance...
401k Plan Loans - An Overview
Ira > 401k Plan Loans - An Overview
Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
In addition to its wealth of educational material, www.iraplus.com offers the ability to select and open an account with one of Entrust's nationwide local offices. Opening an account could not be simpler. All the necessary forms are available online together with detailed, yet easy-to-follow instructions. And both customers and non-customers may access the local and national event calendars, newsletters and questions and answer board."As we continue to grow the website allows us to continually share our resources, experience and expertise with an ever expanding audience of smart investors who want to take control of their investments," commented Hubert Bromma, President and CEO of Entrust.
Lisa Moren, Marketing Director for Entrust added,
"The expansion of our CE courses for real estate professionals, CPA and CFPs has allowed us to educate the industry in the use of Entrusts World of Choices?.
"Visitors also...
Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
Ira > Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home