If you’re looking to purchase a home, and have funds invested in a 401k plan that you’d like to use as a downpayment, here are all the different options you can take, and important factors to consider before making a final decision. Can I use my 401k to purchase a home? Some retirement plans, like […]
Normally, when you take an early distribution from your 401k plan, before the eligible withdrawal age of 59½, you’re required to pay a 10% penalty plus income taxes on your withdrawal. For example, if you’re under the age of 59½ and take a distribution of $20,000, you’ll be required to pay $2,000 as an early […]
One of the most common questions around solo 401k eligibility is: Can I contribute to a solo 401k if I also receive a 401k plan at my day job? As long as you meet the eligibility requirements of a solo 401k, you’re allowed to contribute to both plans if you receive a 401k at your […]
Qualified retirement plans, like a 401k, have a nondiscrimination rule stating that all employees of a company must receive the same retirement benefits, regardless of their position and income level at the company. To do this, a company must divide their employees into two different groups: The IRS sets the qualifications for each group each […]
An early distribution from your 401k is typically taxed with a 10% penalty plus income taxes if you’re under the age of 59½. However, the IRS can grant an exemption if the withdrawal is taken due to hardship. You’ll still have to pay income taxes, but you won’t have to pay the 10% penalty. How […]
If you’re looking to take money out of your 401k plan, either through a rollover or withdrawal, it can take anywhere from a few business days to two months, depending on what options you choose. How long does a 401k rollover take? A 401k rollover is the transfer of money from your old 401k plan […]
If you have assets in a 401k plan and are approaching retirement or considering leaving your employer, there are several options you can take. You can take a withdrawal, keep the old 401k (if your former employer allows it), or do a 401k rollover into an IRA or another 401k plan. What is a 401k […]
If you’re a business owner, you have the option to open a SEP IRA or 401k at your company. These accounts can only be opened by a business owner; employees cannot establish a 401k or SEP IRA on their own, like they could with an IRA. The main difference between the two accounts is that a business […]
Two of the most popular types of retirement accounts are the 401k and the IRA. They both offer tax advantages but have different eligibility rules, contribution limits, withdrawal rules, and investment options. Main differences between a 401k and IRA The rest of the article below will expand on these differences. Eligibility differences A 401k is an employer sponsored plan and […]