YOUR FINANCIAL ADVISOR 401K MANAGEMENT TIPS

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YOUR FINANCIAL ADVISOR 401K MANAGEMENT TIPS
Once you know that your company offers a 401K,,
its time to start asking the right questions so
you can maintain your retirement funds and do
your part to help the money grow. Here are some
practical management tips that will increase the
chances of your financial security at
retirement. VESTING SCHEDULE You should be aware
of your cowpaYys vesting schedule to know when
you actually have access to the money. This is
especially true for Millennials, since people in
this age group tend to change jobs about every
four years, and may not be getting any retirement
benefits from their various jobs because the
money hasYt vested yet. According to financial
professionals, about one in every four people who
changes jobs has forfeited retirement money, and
this is the case for one out of every two
Millennials. Its important to think about
retirement income when making career
moves. TAXES When you initially put money into a
401K, youll receive a significant tax benefit.
Youll also see that your salary has been
reduced, because your money is going into your
retirement fund. However, by the time youre
ready for retirement, youll have hundreds of
thousands of dollars in your 401K, but youll be
taxed each time you withdraw the money. This
results in a huge bill for you, and of course, it
cuts into the money you use to live after
retirement. Keep in mind that 401K assets are
pretax, and all the funds are taxable. So, if you
have 10,000 in your 401K, and youre in the 25
tax bracket, you actually only have 75,000 that
you can access. This is part of the reason that
some employers are now offering the Roth 401K to
employees, and this retirement fund is especially
beneficial for those in their 20s and 30s. taxes
have already been taken out, so if you use the
Roth 401K, you woYt have to pay additional taxes
when you withdraw the money. However, less than
half of all employers provide the Roth 401K
option, and only about 7 of employees are
actually using it. If you think the Roth
retirement savings plan is best for you, consult
with your financial advisor.
MONITOR YOUR WITHDRAWALS Once you retire and are
able to access the money, doYt take out too much
too soon. Its best to withdraw no more than 5
from your retirement account each year. If you
have additional assets, the number can be a
little higher. If you retire at an older age
(around 70), your retirement time is shorter,
which means you may be able to withdraw higher
amounts. If you also have a pension, this could
give you access to 401K withdrawals at a higher
rate. You may also be able to take advantage of a
higher rate if you work part-time during
retirement or own rental properties or other
forms of real estate.
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In addition to these tips, its also very
important to have a fund for emergencies. Start
an emergency account in addition to your 401K, so
that youre not cutting into your retirement fund
when unexpected events come up. This will give
you access to your 401K for a longer period of
time and help you avoid penalties. Articles
Source http//brandwz.com/2017/05/09/401k-managem
ent-tips/ http//www.richardbrothersfinancial.com/
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