401K Plan Fees
What are 401K Plan Fees? If you aren’t sure what those little charges are to your 401K plan, then here is a simple list of some of the basic 401K plan fees that can be charged against your 401K retirement account. Now, this is not an inclusive list of 401K plan fees, as there are more specific fees that can be charged depending upon your investment portfolio. If you have stocks, bonds or mutual funds in your 401K, there are certain to be other charges.
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Bear Stearns and Your 401K
With today’s announcement that Bear Stearns is being merged with JPMorgan and Company, will your 401K be affected? There is lots of speculation about this due to the delicate nature of the economy at this time. What will your 401K be like in the future due to the Bear Stearns collapse? Is your 401K safe with the Bear Stearns and JP Morgan merger?
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401K Debit Card
So, what exactly is the 401K Debit Card program? Well, it is just what it sounds like – a debit card that is tied into your 401k account.
The 401K Debit Card allows you to open a line of credit against the amount available in your 401K account. This will allow you to borrow against loan provisions of your 401K account. Yep, you can go shopping for that big screen HDTV and instead of using a credit card or money you have in the bank, you can swipe your 401K debit card and use those funds.
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Roth 401K Benefits
What benefit does a Roth 401K have over a traditional 401K? A Roth 401K combines the features of the traditional 401(k) with those of the Roth IRA. The Roth 401K is offered by employers like a regular 401K plan, but with a Roth IRA, your contributions are made with after-tax dollars.
Although you don’t get the tax deduction up front, meaning you pay the taxes on the money now, the account grows tax-free, and withdrawals taken during retirement aren’t subject to income tax. This can translate into tax savings as most people are in higher tax brackets as they get older. Also, you won’t pay taxes on the money provided you’re at least 59 1/2 and you’ve held the account for five years or more.
The Roth 401K concept was introduced with the Economic Growth and Tax Relief Reconciliation Act of 2001, which stipulated that employers could start offering these plans in 2006. So far, there is a relatively low amount of employers which offer the Roth 401K.
The Roth 401K will offer some advantages to high-income individuals who haven’t been able to contribute to a Roth IRA because of the income restrictions. The Roth IRA eligibility for 2008 phases out between $101,000 and $116,000 for single filers and $159,000 to $169,000 for those who are married and file jointly. There are no income stipulations for the Roth 401K.
Currently in 2008, the Roth 401K accounts are subject to the contribution limits of a regular 401K — $15,500 for 2008, or $20,500 for those 50 or older by the end of the year — allowing individuals to stock away thousands of dollars more in tax-free retirement income than they would through a Roth IRA. (In 2008, Roth IRA contributions are limited to $5,000 a year, or $6,000 for those 50 or older.)
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401kinfo4u.com is here to answer the simple questions that you may have about your 401k.
If you are new to a 401k, looking into getting a 401k, or just curious about how it might fit into your retirement package, then you have come to the right place.