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YOUR FINANCIAL ADVISOR 401K MANAGEMENT TIPS

Once you know that your company offers a 401K,, it’s time to start asking the right questions so you can maintain your retirement funds and do your part to help the money grow<br>

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YOUR FINANCIAL ADVISOR 401K MANAGEMENT TIPS

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  1. YOURFINANCIALADVISOR401K MANAGEMENTTIPS Onceyouknowthatyourcompanyoffersa401K,,it’stimetostartaskingtherightquestionssoyoucanmaintainyourretirementfundsanddoyourparttohelpthemoneygrow.Herearesomepracticalmanagementtipsthatwillincreasethechancesofyourfinancialsecurityatretirement. VESTINGSCHEDULE YoushouldbeawareofyourcoŵpaŶy’s vestingscheduletoknowwhenyouactuallyhaveaccesstothemoney.ThisisespeciallytrueforMillennials,sincepeopleinthisagegrouptendtochangejobsabouteveryfouryears,andmaynotbegettinganyretirementbenefitsfromtheirvariousjobsbecausethemoneyhasŶ’tvestedyet.Accordingtofinancialprofessionals,aboutoneineveryfourpeoplewhochangesjobshasforfeitedretirementmoney,andthisisthecaseforoneoutofeverytwoMillennials.It’s importanttothinkaboutretirementincomewhenmakingcareermoves. TAXES Whenyouinitiallyputmoneyintoa401K,you’ll receiveasignificanttaxbenefit.You’ll alsoseethatyoursalaryhasbeenreduced,becauseyourmoneyisgoingintoyourretirementfund.However,bythetimeyou’rereadyforretirement,you’ll havehundredsofthousandsofdollarsinyour401K,butyou’ll betaxedeachtimeyouwithdrawthemoney.Thisresultsinahugebillforyou,andofcourse,itcutsintothemoneyyouusetoliveafterretirement. Keepinmindthat401Kassetsarepretax,andallthefundsaretaxable.So,ifyouhave$10,000inyour401K,andyou’re inthe25%taxbracket,youactuallyonlyhave$75,000thatyoucanaccess.ThisispartofthereasonthatsomeemployersarenowofferingtheRoth401Ktoemployees,andthisretirementfundisespeciallybeneficialforthoseintheir20sand30s.taxeshavealreadybeentakenout,soifyouusetheRoth401K,youwoŶ’thavetopayadditionaltaxeswhenyouwithdrawthemoney.However,lessthanhalfofallemployersprovidetheRoth401Koption,andonlyabout7%ofemployeesareactuallyusingit.IfyouthinktheRothretirementsavingsplanisbestforyou,consultwithyourfinancialadvisor. MONITORYOURWITHDRAWALS Onceyouretireandareabletoaccessthemoney,doŶ’ttakeouttoomuchtoosoon.It’s besttowithdrawnomorethan5%fromyourretirementaccounteachyear.Ifyouhaveadditionalassets,thenumbercanbealittlehigher.Ifyouretireatanolderage(around70),yourretirementtimeisshorter,whichmeansyoumaybeabletowithdrawhigheramounts.Ifyoualsohaveapension,thiscouldgiveyouaccessto401Kwithdrawalsatahigherrate.Youmayalsobeabletotakeadvantageofahigherrateifyouworkpart-timeduringretirementorownrentalpropertiesorotherformsofrealestate.

  2. Inadditiontothesetips,it’salsoveryimportanttohaveafundforemergencies.Startanemergencyaccountinadditiontoyour401K,sothatyou’re notcuttingintoyourretirementfundwhenunexpectedeventscomeup.Thiswillgiveyouaccesstoyour401Kforalongerperiodoftimeandhelpyouavoidpenalties. ArticlesSource: http://brandwz.com/2017/05/09/401k-management-tips/http://www.richardbrothersfinancial.com/corporate-retirement/401k-plan-management

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