Posts Tagged ‘401k’

The rules of 401k hardship withdrawals

Posted December 10, 2008 by Bernz

Thinking about tapping your 401K to get through tough times? You may qualify for a hardship withdrawal if you meet certain conditions. And if you do qualify, you should expect to incur a substantial financial penalty PLUS a 10 percent early withdrawal penalty if you’re younger than 59 1/2.

These are the conditions that you or someone in your immediate family should meet.

cd_artHave outstanding and un-reimbursable medical expenses (excluding cosmetic surgery). You’ll need to supply a copy of your explanation of benefits (EOB) from your insurance company showing what part of your medical expenses are covered and which are not.

Prevention of eviction or foreclosure (on your primary residence). If you are facing eviction or foreclosure you can seek a hardship withdrawal to cover the outstanding expenses necessary to bring your account current. (more…)


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What’s the BIG deal about a 401K? Think Free Money!

Posted November 18, 2008 by Bernz

Think of a 401K as a sign on bonus that comes with a job offer because if your employee benefits include a 401K plan that is essentially what you’re getting.

20071213_401k_18A 401K is a retirement investment account funded by money that comes directly from your pay check. In other words these funds are automatically deducted from your pay check and they are not taxed. After the money is entered into your 401K it can then be allocated to different types of other investments such as: bonds, stocks, mutual or money market funds.

Many employers offer to match your 401K contribution. This is where the bonus part comes in. Let’s say you contribute $75 a month to your 401K and your employer matches your contribution dollar for dollar, you’ve earned another $75. An even better part of the deal is that as long as your money stays put, it draws interest. That’s additional earnings on top of your savings. And yes, the interest earned is not taxed. Other advantages of contributing to a 401K plan include: (more…)

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The Pension is Dead, Long Live the 401K!

Posted November 2, 2008 by Bernz

A Guide to Those Born Before 1980

As everyone knows, as more and more jobs get sent overseas fewer and fewer benefits are getting handed out to workers. What is even worse is that Social Security is in grave jeopardy. Neither of these two situations are going to resolve themselves any time soon. So the IRS in their has created tax-free vehicles for the purpose of long-term investment for retirement.

401k-signThe 401K is the simple tax code for it. If your employer has a matching offer make you take advantage of it fully. The old theory of always saving money becomes most important in the case of a 401K. These vehicles only work and are effective when you put money in them religiously, so keep that in mind. that 401K’s don’t have strict limits like IRA’s and you can contribute a large amount of your paycheck to them. 10% of your yearly income is very wise and at those rates by the age of 65 you will have plenty of money to retire on.

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