401K » Retirement Plans

If you’ve missed having 401(k) matches for the past year or longer, you’ll be happy to know the 80 percent of employers who suspended matches should have them restored by mid-2011. This news comes from the Profit Sharing/401(k) Council of America, which recently announced that in addition to the 40 percent who had already restored matches, another 40 percent are expected to do so in the coming months.

Restoring Matches a Top Priority

You may not have heard much about 401(k) theft, but it happens–not the kind where employees take money from their own accounts illegally, either. This is a different type of theft–one that results in an employer stealing money from your retirement plan.

Many people believe their employer has their best interests at heart, but in a cash-strapped economy, everyone is trying to get their hands on free money and people can become desperate. If you don’t want to lose the funds you’ve worked for years to save, learn about this type of theft and the 401(k) protection that’s available to keep it from happening to you.

Individuals with money in 401(k)s saw an increase in savings of 32 percent last year, according to a study released by the Employee Benefit Research Institute and the Investment Company Institute. This is good news for Americans who lost a reported 27 percent or more in their accounts after the financial crisis in 2008. The findings show there’s hope that money can be regained after the loss in time for retirement.

Accounts Averaged Nearly $110k in 2009

If you are one of the millions of people who are eligible to participate in an employer-sponsored 401(k) plan, do it! There are numerous benefits–both present and future–that are available to you for contributing to this type of retirement plan.

First Step: Contribute

Retirement planning is important–there’s no debating that. Saving and investing in your 401(k) or IRA accounts is something all financial planners advise. However, for many people, allocating money to a retirement fund takes up a big chunk of a paycheck. If you’re maxing out your annual 401(k) and IRA contributions as you’re advised to do when possible, you might not have much money left over to fund other major milestones in life, like, for example, buying a home.

The 2010 limit for 401(k) contributions is $16,500 and the limit on IRAs is $5,000. That’s $1,350 and about $415 a month, respectively, of your gross income set aside just for retirement. As daunting as it may seem, financial planning for retirement shouldn’t be delayed or pushed aside unless there are very valid reasons.

If you have a 401(k) retirement fund, you have probably been spending a lot of time stressing over it recently. The economy has been hit hard and many people saw the funds in their 401(k) plans seriously drop in value. To make matters worse, many people continue to lose their jobs all over the country and are wondering what to do with their 401(k) plans since many companies cease participation if you no longer work there.

The good news is that you can perform a 401(k) rollover, in which you taking the money from your current 401(k) and roll it over into a new retirement savings plan. Of course, as with most financial transactions,there are 401(k) rollover fees.

If you’re afraid to look at your 401(k) statement this quarter, you’re not alone. The stock market nose-dive has taken its toll on the retirement savings of millions of Americans. What you might not know is that for most people, your average retirement account is not the most well-rounded portfolio you can get. In fact, there are five common problems with the average American’s 401(k) plan that might be leaking money from your retirement fund. Take a look at these and see if any of them sound familiar.

The Useless Tax Deduction

Many people want to take full advantage of the 401(k) returns they can earn in their retirement plan. The money you put into your 401(k) fund is put into the investment instrument of your choice, such as stocks, bonds, or money markets. However, the average 401(k) returns you can expect from your plan–the profits your money makes you–will depend on the choices you make regarding where and how that money is invested.

401(k) Investment Strategy

If you are in the position of experiencing the economic crunch and trying to find additional possible revenue streams to help you get through these times, your 401(k) might be looking pretty tempting.

If you have a 401(k) retirement investment portfolio, you are allowed to borrow against the principal under certain circumstances. However, although you can borrow from your 401(k), there are many reasons why you should only do so as a last resort.

For years you have known not to touch the money in your 401k or IRA as substantial amounts of money would be lost in the shape of penalty fees and taxes. However, if the current turn of economic events is leaving you with no other option then to tap into the “forbidden zone” of your retirement assets, there are some steps you can take to help mitigate and lessen the damage you may cause by tapping into either your 401k or IRA for a pre-retirement withdrawal.

IRA Strategies