Generally speaking, do most 401k plans allow the participant to invest in individual stocks?
Q. And by individual stocks, I don't mean the company's stock. I'm talking about non-employer stocks traded on an exchange. In addition, do most 401k plans allow the participant invest in any mutual fund of his/her choice? Or do most 401k plans offer only a limited mutual fund selection? *I know plans vary. But, this is just a general question.
Asked by Yay Ah! - Sat Dec 5 16:38:55 2009 - - 5 Answers - 0 Comments

A. No, it's not always investing in stocks. It all depends on what your company offers.
Answered by Max M - Tue Dec 8 17:51:00 2009

What happens to my 401k plan if I decide to leave USA and go back to Indonesia?
Q. What happens to my 401k plan if I decide to leave USA and go back to Indonesia. I have my 401k plan for about 5 yrs. What are the consequences and how should I save from getting penalised ? I am resident in USA and 35 yrs of age.
Asked by rainbow - Tue Dec 11 15:04:11 2007 - - 6 Answers - 0 Comments

A. uncle get his money up front -- if you take a payout the tax man get his the same time you get your payment!!!
Answered by mister ed - Sat Dec 15 09:37:27 2007

When your 401K fund prices are down is it good to keep putting money in?
Q. I have a target retirement fund for all my 401K money and it's down right now. If I keep adding money does it buy more shares of it so when the price goes up I do even better?
Asked by gallilea - Thu Jun 26 15:38:47 2008 - - 6 Answers - 0 Comments

A. 2008 contribution limits are $15,500 for age under 50 and $20,500 for age 50 and above. Increase your contribution as much as you can afford. Having said that you need at least 6 months of monthly expenses including any loan payments saved in cash before you put more money in your 401K. In my opinion, stock markets will stay down for next 3 years due to stagflation caused by oil crisis. So, you have time to increase your contributions gradually if you can not increase them immediately to the maximum.
Answered by jsmithlong - Thu Jun 26 21:30:04 2008

What is the maximum yearly contribution to 401k plans?
Q. The limit for a Traditional 401k is $15,500/year, and the limit for a ROTH 401k is $4000/year. However, this year I put $3000 in my Traditional, and $1500 in my ROTH 401K, and Turbotax says I am over my legal limit. There seems to be a conflict in the tax code, so I must be misunderstanding something. Even my payroller and retirement account company are confused.
Asked by axiomflash - Mon Mar 24 18:32:29 2008 - - 3 Answers - 0 Comments

A. you are entering in your 3000 into Turbo Tax and you shouldn't. The 401k deduction is already accounted for in your net income. If you look at your w-2 you'll see that the social security income is at least $3,000 higher than the taxable amount. The difference is your 3k traditional 401k contribution. Little confused when you say $4k limit for Roth 401k. That's not true...the $4k limit is for all IRA's not 401k's. The limit for 401k's is $15.5k and can be split any way between ROTH and Traditional. Either way it's all accounted for in the w-2 and shouldn't be entered into TurboTax at all.
Answered by digdowndeepnseattle - Wed Mar 26 14:22:44 2008

Should I quit contributing to 401k and put the extra money I'll get paid to pay off debt?
Q. I owe 37k on a home equity line of credit, and another 22k on a car loan. The interest rates on those loans arent that bad (7% and 8%) but I am paying a lot in interest every month. I have been putting the max (15%) of my paycheck into 401k. Does it make sense to reduce my 401k contribution to 1% (so I get the company match) so I can pay off loans faster?
Asked by none - Sun Feb 3 23:18:49 2008 - - 6 Answers - 0 Comments

A. The home equity loan is fine since its interest is tax deductable. But the car loans gotta go. Postpone your 401 contribution until you get in control of you debt.
Answered by PortRichey - Sun Feb 3 23:25:29 2008

How can I access my 401K for funds, if fired from work?
Q. ... I have money invested in my 401K. If I get fired from work, what kind of taxes will I owe if I need to access my 401K for funds, while looking for a new job? Thanks!
Asked by soulravah - Mon Apr 21 11:42:02 2008 - - 4 Answers - 0 Comments

A. You will be charged a 10% penality if under 59 1/2 and will have to pay taxes on the amount you deduct from that 401k. You can opt for no taxes at this time and pay them when you file your taxes for 2008. I have done this and it isnt that bad. Hey if you need the money you have a right to obtain it.
Answered by sp2249 - Mon Apr 21 11:55:20 2008

How should I invest my 401K if I intend to leave my current company after 1 year?
Q. So, if I intend to leave my current company in a year & move my 401K into another 401K or IRA option, does it make sense to just keep everything in a money market fund? Would I have to stay with the same funds for 5 or more years to reap any benefits from the stock market? Thanks.
Asked by whatda - Tue Oct 21 18:00:42 2008 - - 5 Answers - 0 Comments

A. Assuming your funds are currently invested in stocks: The US equity market is down some 40% from the peak it reached in 2006. We don't how much of these losses will be recovered by the time you move. At rollover, all your positions will be sold and your paper losses will become realized losses. Therefore, unless the markets have recovered significantly within the next year, you are better off leaving it alone in your current employer plan. You can always roll it over at a later time. Suppose you have already moved all your 401K investments to cash (i.e money market funds): You can rollover your cash to your new 401K plan or IRA as soon as you are able to. From that point you could move the funds to the appropriate investment… [cont.]
Answered by eternal student - Tue Oct 21 19:08:32 2008

How is the 401k loan interest compounded?
Q. I want to understand if the 401k loan interest schedule is different from a mortgage interest schedule. For example, in a mortgage payment the interest is the most of it. Is it the same with 401k loan? Reason for asking is to see if it makes financial sense to use 401k loan to pay off a mortgage on a property. Thanks!
Asked by mishatim - Mon Jul 2 14:37:20 2007 - - 0 Answers - 0 Comments

A. The 401K interest is paid back to yourself rather than to a bank. So no matter how it is calculated, the money is yours no matter what. However, paying off a mortgage with a loan from your 401k is most certainly a bad idea. The interest on your mortgage is tax deductible. If your interest rate is 7%, in reality you're only paying around 5% after the tax advantage. On the other hand, the official interest on your 401k is irrelevant (because you pay it to yourself)... but the real cost of borrowing from your 401k is that your money is not earning the interest that it could be if invested. You should be making between 8% and 11% average in your 401k if it's invested properly. (8% if you're nearing retirement, 11% if you're more than… [cont.]
Answered by cuztis209 - Mon Jul 2 21:31:24 2007

What happens to 401k loans when you change jobs?
Q. If I am planning to leave my job in the near future and I have 30k in my 401k and approx. 12k in loans, how will the loans be repaid? Do I pay the taxes at year end? Also what if I decided to cash out the rest?
Asked by Flying J - Wed Jun 20 19:04:28 2007 - - 4 Answers - 0 Comments

A. It depends on the requirements of your 401(k) plan. Some 401(k) plans allow you to continue to make payments on loans after you leave your job. Others require you to pay back loans within a certain number of days (often 30, 60 or 90) after you leave, or the loan will become a distribution. If you have the money and want to pay back the loan, you can call the 401(k) administrator to find out where to send the check. The administrator should also be able to tell you about how the loan can be repaid - if it is within a certain time period, or if it can be over the original life of the loan. If the loan becomes a distribution, you will owe your marginal tax rate plus a 10% penalty, when you file your taxes for the year the loan was… [cont.]
Answered by aj485 - Wed Jun 20 20:11:35 2007

Any way to use 401k to help pay for grad school?
Q. My husband is starting business school in the fall. I completed his FAFSA and our expected personal contribution is $53k per year (yikes!). He has a considerable amount saved in his 401k account and since we are both young it might make sense to use that 401k retirement $ towards school expenses. Is there any way to do this without incurring huge penalties? I know we would pay taxes on the amount in the 401k, but if we are using it for education expenses it seems like there might be some way to use the money without paying the penalty... Does anyone know of a good way to do this?
Asked by mcrevell80 - Tue Feb 27 09:36:02 2007 - - 4 Answers - 0 Comments

A. way better off iwth student loan...interest rate is lower AND partially deductible. Further, the time period is extended out. A 401k loan is payable in only 5 years. Hefty payments to make while he's in grad school. At least the student loan payments don't start until you graduate. Do not take a distribution from your 401k for this...that 50k that you'll need will end up costing your retirement account about 500k. AND that's not including the penalty.
Answered by digdowndeepnseattle - Tue Feb 27 11:58:12 2007

What's a good 401K allocation mix for these current times for a 45 year old person?
Q. We recently got a new 401K and need to decide our allocation mix between large caps, foreign and bonds. Not sure if I should take the current economic situation into consideration or just stay the course. Thanks!
Asked by Emily Dew - Mon Jan 28 20:05:18 2008 - - 4 Answers - 0 Comments

A. You should not take the current economic situation into consideration. A 401k is a long term investment. You still have about 20 years until retirement. Dont invest for the long term, with a short term view. You should have about the same percentage as your age invested in bonds, and the rest in equities, with about 20 percent or so in international equities. But the percentages depend on your other assets, other income you will have at retirement and your risk tolerance.
Answered by jeff410 - Mon Jan 28 20:14:08 2008

Can I withdraw from my 401k without penalty to fund my college tuition?
Q. I am planning on working for a couple of years before going to school for a regular MBA. Can I contribute to my 401k plan now and withdraw it without penalty to fund my college tuition? Or is it better to take the tax hit now, rather than take the penalty later ?
Asked by chemist - Thu Sep 11 21:13:07 2008 - - 2 Answers - 0 Comments

A. If you leave your current job before going to school, and you do a direct rollover from your 401k to an IRA, you can use the proceeds for qualified higher education expenses. You will have to pay regular income tax but not the premature distribution penalty. If you anticipate that your income will be less while you're a student, then it is probably to your advantage to take the deduction now and pay regular income tax on the proceeds later when you might be in a lower tax bracket. MADMAN is incorrect regarding the premature distribution penalty. On page 53 of the IRS Publication 970, it states that you can withdraw from your IRA without the penalty if you use the proceeds for qualified higher education expenses in the year that you… [cont.]
Answered by doreen k - Thu Sep 11 21:27:30 2008

How can I move my 401k money from my employer without leaving my job?
Q. My employer does not contribute to my 401k. I want to move my money without penalty to another financial institution.
Asked by Bill K - Fri Apr 4 14:58:11 2008 - - 4 Answers - 0 Comments

A. You really cannot move it without taxes/penalties.
Answered by God is Good! - Fri Apr 4 15:01:23 2008

What's the difference between withdrawing your 401k and taking a loan from your 401k?
Q. Is it possible to take a loan from your 401k with out having to pay taxes on it till 2010 taxes.
Asked by Erica T - Sun Oct 25 21:28:54 2009 - - 4 Answers - 0 Comments

A. If you take out a loan you will not owe taxes now. If you pay back the loan you will never owe taxes on the transaction. If you do not pay it back you will probably owe taxes but not always and not until later. However, you should talk to the administrator of your 401k plan before you spend more time contemplating your decision. Your options are going to vary dependent on the rules set up by your plan. And if the money is from a previous employee it unlikely a loan will be an option. Also know that what you need the money for can affect both the tax penalties as well as what your plan options are.
Answered by Lynne - Sun Oct 25 21:52:06 2009

How old must you be to enroll in a 401k within your company?
Q. Hi all! My son's girlfriend is only 19 and her company has a 401k program. She was told that she can not contribute until she is 21. They live in Illinois. Does anyone know if there are age restrictions on beginning a 401K? Thanks in advance for your answers!
Asked by zonagal43 - Tue Oct 21 13:55:32 2008 - - 7 Answers - 0 Comments

A. The statutory eligiblty set by the IRS for 401(k) plans is 1 year of service (defined as working more than 1000 hours) and age 21. The plan must also provide two entry dates, one at the the beginning of the plan year or six months following the completion of the requirements . From there companies can pick their own eligiblity requirements, as long as it does not exceed the IRS statutory.
Answered by Emo - Wed Oct 22 15:36:10 2008

How much is taxed when you take money out of your 401k?
Q. I recently got divorced. I have to sign over 1/2 of my 401k to her. I am thinking of asking her to buy her out less any taxes she would have been charged. What percentage is taken out of a 401k when removed. I am trying to think of an offer to give her. The 401k is not alot. (24,000) She gets 12k. Any Ideas?
Asked by kydadoflouisville - Tue Aug 8 10:25:30 2006 - - 6 Answers - 0 Comments

A. Before I give advice, I was wondering if you have a QDRO (qualified domestic relations order) in place. If so, you may already have some protection from tax implications on this. Check with your attorney to see if he set up the QDRO. Also, it seems to me that it could be possible to handle this an entirely different way. Since the main idea is to divide your assets in half, couldn't the decree have been set up such that you would retain 100% interest in the 401(k) and she would receive cash? It seems like kind of sloppy planning to have either of you end up with tax implications from this. Some states have certain laws that preclude this sort of thing, but check with your attorney to see if it's too late for the QDRO or dividing the assets… [cont.]
Answered by SuzeY - Tue Aug 8 23:01:43 2006

How much money should I have saved in my 401k?
Q. I am in my early 40s and have watched my 401k drop by about 40%. What's a good rule of thumb when looking at your 401k balance? How much money should you have saved by your early 40s?
Asked by MominOhio - Thu May 7 15:42:02 2009 - - 1 Answers - 0 Comments

A. There is no standard amount to have in your 401k. The more you have saved the better (as I'm sure you already figured out).
Answered by 17 Year Old Blogger - Thu May 7 22:51:45 2009

How do you explain 401K benefits to employees so that it increases participation?
Q. Explain 401K benefits in a way that reached the audience, is easy tof them to understand and emphasize the advantages of a 401K. How can you explain this benefit during employee orientation so that it results in high participation, less confusion and fewer phone calls for clarification.
Asked by Tauhric B - Sun Dec 10 12:31:14 2006 - - 3 Answers - 0 Comments

A. At any company I have worked for this is provided by the 401k administrator. They usually have meetings each year with any interested employee. (this may be law) You are legally bound NOT to influence employee's decisions. Yes, 401k's are great asset, but your not the one to tell your employee's. The only thing an employer can do is offer better "matching funds", but again...NO persuasion. You should check the IRS rules for employers regarding 401K. 401K is named for the IRS code that regulates them.
Answered by Mike M. - Sun Dec 10 12:40:34 2006

How long does it take to get 401K disbursement for under 59 1/2 year old, hardship withdrawal once filed?
Q. My husband has been out of work and we have separate 401k plans but need to take a lump sum from his plan to help with the bills or we won't have a place to live. 1. How long does this process take? 2. We want to opt for the 10% and 20% tax and penalty to be taken out before the disbursement. Will we be taxed or penalized again on it when we file our taxes?
Asked by Concerned - Thu Apr 24 09:44:43 2008 - - 4 Answers - 0 Comments

A. Ask the trustee of the 401K plan how long it will take - each one is different. They should be able to give you a good idea on when you'll get the check. The amount taken out for tax is just withholding, like the amount taken out of your regular paychecks. If you have the 20% plus the 10% penalty taken out, and your tax bracket is less than 20%, you could end up getting some of it refunded to you since you'd owe less than what was withheld. If your tax bracket was more than 20%, then you could owe more Good luck.
Answered by Judy - Thu Apr 24 09:57:38 2008

How long do you have to deposit 401K funds withdrawn from one account to another?
Q. I want to move my 401K from my previous employer to my current one. Once I withdraw the funds, how long do I have to place them into a new retirement account? Can I also keep out some of these funds (I understand that this amount kept out will be subject to taxes and penalties)?
Asked by Brett C - Tue Mar 9 10:38:34 2010 - - 6 Answers - 0 Comments