Retirement Account
When you retire, you will need to have a retirement account that will get you through your golden years. One type of account is the 401(k) retirement account. This is one that employers will help you with.
There are other accounts that you can set up such as an individual retirement account, or IRA, or a Roth IRA. Both accounts are ones that you set up on your own with the help of a financial advisor. You could also get a precious metals IRA. All these accounts are a big help to your golden years.
If you decide to do a precious metal IRA, or gold IRA, you will need to have someone who knows all about them. You could contact Goldco to help you get the information that you need. They have been helping people with this for many years.
This article will give you more information about the 401(k) retirement account. It will help you to learn more about this important account. You can also do more research to find the information you are seeking.
401(k) Retirement Account
- Rules – There are specific rules that go along with the 401(k) that you must follow. These rules are meant to keep you protected and to help protect your employer: https://www.law.cornell.edu/wex/401(k)_plan. Your employer can even have more restrictive rules than the IRS, so you need to find out about all the rules that are applicable.
- Early Retirees – You can withdraw from your 401(k) as early as your 55th birthday if you are retired. If you begin a new job, you must stop any withdrawals. With an IRA, you can’t withdraw money until you are 59 ½ years old. You need to speak to your financial advisor to see how the withdrawals work.
- Taxes – There are two types of 401(k) accounts – the regular one and a Roth 401(k). If you have a regular one, you will pay taxes on everything you withdraw. If you have a Roth, you don’t pay taxes on it at all. You can switch from a regular one to a Roth with the help of a financial advisor. Your employer might have some answers for you, as well.
- Investment Options – Your employer will set the investment options that you will have. You don’t get to choose what they invest in, and they may not even tell you what they are investing in. There are 401(k)s that you get to choose the investments, but they are special accounts that are usually started by your employer. You can speak to your financial advisor to find out more information.
- Moving to an IRA – You can move your funds from a 401(k) to an IRA and that has become easier over time. You must leave your employer that has provided the 401(k) to be able to roll it over to an IRA. You might want to do this because an IRA will give you more flexibility about how to invest. You can also add gold and precious metals to your IRA if you choose to have a gold IRA.
- Consolidation – You can consolidate your plans if you have more than one. You can have more than one plan if you have had multiple employers over the years that have provided you with a plan. Consolidating these plans will make it easier for you to track them. It will also help you to know how much money you have invested in all your accounts.
- Loans from Your Plan – Another benefit of this plan is that you can borrow from it – up to fifty percent of the amount up to fifty thousand dollars. Some employers will even let you do this once you have retired from your job. This option is good for you if you have a large expense that you need to pay for such as a move across country.
- Required Minimum Distributions – Once you have turned 73 years old, you must take the required minimum distributions, or RMDs. This means that you must take a minimum amount of your investment out each year. Learn more about this here. This is changing to make it more flexible, but you can face stiff tax penalties if you don’t withdraw the minimum amount.
- Keep Beneficiaries Updated – You need to make sure that your beneficiaries are up to date so that they won’t have issues getting your money once you have passed away. If you pass away without any beneficiaries, your money will be left to your estate. This causes many issues for your dependents that they must work through.
- Frozen Funds – If your employer goes bankrupt, your funds can be frozen, and you won’t have access to them for a while. You could also lose access to your funds temporarily if your company is acquired by another company. It can take as long as eighteen months before you have access to your funds.
Conclusion
A 401(k) is a retirement fund that employers fund for you. You will also contribute to your fund through your paycheck. You will then have access to these funds once you retire, which can be as early as age 55, or as late as age 73. You will also need to make sure that you have beneficiaries listed and keep that list up to date.
