About.com Retirement Planning

2010 401K contribution limits to be unchanged

Fri, 06 Nov 2009 08:58:29 +0000

Although the formula which determines how much the 401k contribution changes each year would have led to a $500 decrease in the permissible 401k savings level, the IRS has decided to permit the limit to remain unchanged. Largely to help companies and service providers from various software modifications, the limits will be the same as 2009's limit.

Read more about your 2010 401k contribution limits, including the catch-up provisions.

2010 401K contribution limits to be unchanged originally appeared on About.com Retirement Planning on Friday, November 6th, 2009 at 08:58:29.

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Don't take your 401(k) money when you switch jobs

Tue, 03 Nov 2009 08:30:39 +0000

As was recently reported, Half of workers changing jobs cash out 401k when they terminate employment. Among workers in their twenties, 60% distribute the entire balance, according to the Hewitt Associates study. Short of needing money for basic essentials like food and shelter, taking money from your retirement plan is not a good idea. Not only do you lose the benefit of the likely significant growth over the rest of your working career, but you also forgo the tax-advantaged nature of that growth. Furthermore, because of the significant taxes due upon the 401(k) distribution plus the likely penalty for early withdrawal, you'll wind up with a check much smaller than the amount of money you remove from your plan. A far better option is a rollover IRA, where your money can grow for many years in the future. There are many benefits to an IRA rollover. In this case, just because most people are doing it (taking the money), really means you shouldn't.

Don't take your 401(k) money when you switch jobs originally appeared on About.com Retirement Planning on Tuesday, November 3rd, 2009 at 08:30:39.

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New IRS resource for owners of small businesses

Fri, 30 Oct 2009 11:27:44 +0000

The Internal Revenue Service (IRS) recently unveiled a new guide for retirement planning oriented at the small business community. This robust web site features information on various self-employment plans including 401(k) plans, SEP-IRAs, and SIMPLE-IRAs. Loaded with links, the web site, called IRS Retirement Plans Navigator, is a great place for additional details for those in charge of assisting small business owners with their own retirement planning as well as those of their employees.

New IRS resource for owners of small businesses originally appeared on About.com Retirement Planning on Friday, October 30th, 2009 at 11:27:44.

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Maximize your 401(k) match

Thu, 22 Oct 2009 10:52:54 +0000

Although 2009 is about to wind to its inevitable conclusion, you might still be able to get your money's worth from your corporate retirement plan account, like a 401(k) plan. Almost all employer-based retirement plans that featuring matching provisions calculate their maximum employer match based on a per-calendar year period. Therefore, even if you had previously neglected to take full advantage throughout 2009, by aggressively contributing to your 401(k) plan between now and the end of December you may be able to receive as much of that "free money" as you would have had you been contributing all year long!

However, once January 2010 rolls around, 2009 is gone and the money you forfeited can never again be realized. So if you've been procrastinating saving for retirement, you've only got a few weeks left to save - and potentially make up for the whole year.

Maximize your employer 401(k) matching program today.

Maximize your 401(k) match originally appeared on About.com Retirement Planning on Thursday, October 22nd, 2009 at 10:52:54.

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Learn more about your corporate retirement plan

Mon, 19 Oct 2009 08:11:58 +0000

I recently attended a conference in New York City featuring some leading financial services technology providers. For my retirement planning audience here at About.com, one seemed immediately worth sharing: Brightscope.

Free for consumers like you to use, Brightscope allows for a "Morningstar-like" visibility into your corporate retirement plan. While not every plan has been analyzed, the database is already quite extensive and continues to grow. Use the database it to compare your current employer's plan to an old plan or even, one day, to a potential new employer's plan.

Information is power and Brighscope is doing a great deal of work to increase transparency in your fund options and fees. Given that you often have very little say as to what you are offered, this is an important initiative.

Remember, you are the eventual retiree to whom the burden of retirement has, in a not so subtle way, been shifted. Take a few minutes to look at Brightscope and share your thoughts and/or recommendations.

Learn more about your corporate retirement plan originally appeared on About.com Retirement Planning on Monday, October 19th, 2009 at 08:11:58.

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No cost of living adjustment (COLA) for Social Security

Fri, 16 Oct 2009 11:11:38 +0000

Due to falling consumer prices, the government recently announced there will be no cost of living adjustment (COLA) for Social Security recipients for the 2010 year.� Since automatic increases were put on the books in the mid-seventies, this is the first time there will not be an automatic year-over-year increase in the checks millions of retirees receive every month.� (For the year 2009, benefits checks increased by approximately 5.8% - the largest increase in nearly 30 years.)

The primary reason for the lack of a 2010 increase is that consumer prices have declined 2.1% since the third quarter of 2008. (Social Security's cost-of-living adjustment, by law, is based on the change in consumer prices from the third quarter of one year to the next.)

You may have heard that there is growing political enthusiasm now for a one-time $250 payment to Social Security recipients to help them deal with the lack of an increased Social Security payment. So, I'm curious, what do you think about the lack of a cola? Furthermore, what do you think about the one-time payment?� There's a section below for open-ended comments and a poll to participate in. I look forward to our lively discussion.

No cost of living adjustment (COLA) for Social Security originally appeared on About.com Retirement Planning on Friday, October 16th, 2009 at 11:11:38.

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SEP-IRAs - An Important Self-Employed Retirement Plan

Fri, 09 Oct 2009 08:43:27 +0000

Next Thursday is the deadline to make your 2008 SEP-IRA account contribution.� A SEP-IRA is a very attractive retirement plan for self-employed individuals due to the large contribution limits.� In addition, SEP-IRA contributions are permitted until the extended due date of your tax return. For most filers, this is October 15.� So, if you had self-employment income during 2008 and you'd like to increase your retirement plan savings, time is ticking.� Read more about SEP-IRAs.

SEP-IRAs - An Important Self-Employed Retirement Plan originally appeared on About.com Retirement Planning on Friday, October 9th, 2009 at 08:43:27.

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Your 401K Match - Maximizing Your 401K Match

Tue, 06 Oct 2009 16:42:40 +0000

Several times a week, I take the time to explain various important pieces of retirement planning - thank you for your kind words.� While I intend to be fairly comprehensive in my approach, it is critical that you remain aware of what is truly the most important retirement planning concept.� To me, when it comes to retirement planning nothing is more important than ensuring you take full advantage of your 401(k) match.

Doing so ensures that you jump-start your retirement savings with other people's (think: your boss') money.� Failure to maximize your 401(k) match means you're literally turning down free money.

What do you think is the most important part of retirement planning?

Your 401K Match - Maximizing Your 401K Match originally appeared on About.com Retirement Planning on Tuesday, October 6th, 2009 at 16:42:40.

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Could you have to pay the gift tax?

Fri, 02 Oct 2009 07:17:31 +0000

Receive a really good birthday present this year?� Buy your girlfriend some really nice earrings?� Don't worry, neither of those gifts are likely to cause you to owe any gift tax (unless, of course, you spend money on jewelry like Kobe Bryant did a few years ago).

Nonetheless, there are some important concepts to be aware of if you ever make a large gift.� Gift tax is only assessed on the person who makes the gift, not the person who receives it. Furthermore, you can easily give up to $13,000 each calendar year without triggering any gift tax.� (You can give an unlimited amount to your spouse provided your spouse is a U.S. citizen). After that, it starts to get very complicated.

Fortunately, I'm simplified the gift tax rules for you. Take a few minutes to learn all about the basics of gift tax.

Could you have to pay the gift tax? originally appeared on About.com Retirement Planning on Friday, October 2nd, 2009 at 07:17:31.

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Asset Allocation and Retirement Plan Investing

Tue, 29 Sep 2009 07:36:28 +0000

Nearly every investment category had poor performance during 2008.� As a result, many people, including experts, began to call for the end of asset allocation as a key investment strategy.� Asset allocation, in its simplest form, is the investments world's equivalent of saying, "Don't put your eggs in one basket."� More specifically, asset allocation is about ensuring that you have your money invested in various asset categories (e.g., stock, bonds, cash-equivalents) in such a manner that they represent your true risk profile.

Learn more about asset allocation, including links to online calculators that will help you develop asset allocations of your own.

Asset Allocation and Retirement Plan Investing originally appeared on About.com Retirement Planning on Tuesday, September 29th, 2009 at 07:36:28.

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