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401k and 403b Plans

~600 answered questions
Parent Category: Retirement Planning
Tax-deferred savings plans. In the case of Roth 401(k) plans, withdrawals are tax-free whereas contributions to standard 401(k) plans are pre-tax and profits are taxable at the time of withdrawal.
The penalty is normally about 10% of the money you pull out. Additionally, you'll have to pay taxes on that money. Finally, you'll miss out on potential gains by not having the money in the market. I wouldn't recommend cashing out your 401(k) early unless it is for a dire emergency.
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Depends on your regional office for example I work in Western New York and I contact The Rochester office.
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At 65 there is no penalty tha I am aware of
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The 401k passes intact to his heirs, with the same penalties if they are not of age (59 1.2) to withdraw it as cash. He can allocate it to specific beneficiaries or describe the distribution in his will.
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After Tax Dollars. Any loan you take is repaid in after tax dollars and 401k loans are no different. The money you take out is not taxed so you get the benefit of that.Technically you can default on it and not repay it at all - then you are hit with the big penalty tax as it would be considered a di…
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July 4 1826
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In 2010 it was $16,500. In 2011 it will be $16,500.
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Same as for 2009. No change.
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401k is fica taxable only..
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The maximums in 2010 are $16,500
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Not for child support, but if arrears exist, as an asset, it is attachable. It can only be considered when if as an old fart, and retired while collecting it, he gets a young chickie pregnant. I had a case of that involving a 92 year old man.
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As an asset, it can be attached, even in cases of retroactive support for a child the man never knew existed.
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The Federal ordinary income tax rate on the 401k funds withdrawn depend on the tax rate of the individual drawing the funds. Early withdrawals (distributions before the age of 59.5) are generally struck with an additional 10% penalty on top of the federal and state income taxes due by the individua…
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You have to rollover the 401k to an IRA (individual retirement account). You can typically do this with the bank providing the 401k. If not, you can have the bank transfer funds directly to the new bank where you setup the IRA. The final option is having the 401k bank send you a check in the mail, …
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(a) Your unemployment benefits depends on how your severance package is being paid out. If you get lump sum severance, then you are good shape for immediate benefits. But if your ex-company keeps you on payroll until the end of your severance period, then your unemployment benefits MAY not kick-in u…
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Depends on the company, Most will allow 2 and up to 50% of vested value to be loaned.
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The 415c limit is $49,000. This includes all pretax, aftertax, roth, catch up contributions, and employer match. There's not a maximum specifically for aftertax.
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Yes, those monies are held in a trust company for your benefit only. You're the only person who can access them.
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Withdrawals from 401k accounts are added to your general income for that tax year.
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The 402g limit (Pre-tax deferral Maximum) for 2010 is $16,500.
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It doesn't mean anything. It is the label of the section in the Internal Revenue Code.
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Most plans allow you to do the lump sum distribution irregardless. You will just want to be mindful that you're going to be taxed on both the account balance and the outstanding loan.
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No, by law if you're married then your spouse is considered your primary beneficiary at 100% unless the spouse signs a document and has it notarized stating otherwise.
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The penalty is 10%. All in all you will pay your tax bracket + 10%. Actually that is incorrect. The question was about a 401k loan. There are no taxes on 401k loans unless you default on the loan. If the loan defaults then yes you would owe 10% penalty plus Federal and State taxes at tax time.
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The K is the section of the IRS code that it is derived from. Here is some more info: The 401(k) plan is a type of retirement plan available in the United States. Named after a section of the 1978 Internal Revenue Code, a 401(k) is an employer-sponsored qualified retirement savings plan. It allows …
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After-tax contributions are contributions that come out of your net pay, rather than the gross pay. They have already been taxed and will not be required to be taxed again however, the earnings on after-tax contributions are subject to taxes and penalties.
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401k's are required to withhold 20% of whatever you withdrawal. There are some exclusions to this. Such as if you're 70 1/2 years old and you're taking a required minimum distribution based on life expectancy the standard withholding is 10%.
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It normally takes your plan administrator 2-3 weeks to receive the notification on non-employment. They may require a specific wait period before a lump sum distribution is permitted. This information would be discussed in your Summary Plan Description.
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Yes. As long as your employer allows you to leave monies in your prior 401k upon separation of service you can participate in as many as you like. I would suggest that you roll them all into one plan to keep track of your investments and better determine retirement forecast.
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It did not change for 2010. The 402g limit (Pre-tax deferral limit) is $16,500 and the catch up contribution limit is $5,500.
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then the distribution amount will be counted as income to you for that yr, you will be receiving 1099 form
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He may, but the funds in the 401K, as well as any other assets he has, are subject to a lien by the State to collect the past-due support. How do I go about getting a lien if he lives in another state?? Contact the child support agency in your state; they can coordinate this with the child suppo…
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One of the exclusions to the 10% penalty is disability. You have to considered completely disable without the ability to ever return to employment. However, you will have to pay taxes on the monies.
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Yes. When monies are deducted from your paycheck they are supposed to be sent to a trust company to protect them. The reason for the trust company to hold them is so no one has access to your funds, but you. You will definitely want to submit your paystubs to your plan administrator to determine the…
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You can contribute to both a 401K and an IRA at the same time (same year).
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Hard to say for there are a lot of brokerage firms/banks you can roll the money over to. May depend on what kind of asset you want to invest that money in...stock then brokerage is probably better. If IRA CD, then bank may be best.
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Apparently, the money you put in a 401K Plan and withdrawn would not be deducted from unemployment benefits, but possibly that contributed by the employer may be deducted. It is best to contact the unemployment office and find out for sure. The Related Link below gives more detail. 401K is similar i…
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They are important because they're helping you plan for your retirement. Social Security is not guranteed and 401k accounts allow you to set aside monies (Normally on a pre-tax basis lessening your taxable income.) to plan for your own retirement. Some plans also offer luxuries such as loans and in-…
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A deduction is made "pre-tax" if it avoids at least one form of taxation. Although contributions to "traditional" versions of 401(k) and 403(b) retirement plans, as well as 457 plans, are "pre-tax" deductions for purposes of Federal income tax, they ARE subject to FICA withholding. In contrast, Se…
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Not all plans allow this feature. You would need to consult your plan administrator or read your Summary Plan Description. A fund-specific withdrawal allows you to take money from a specific investment fund rather than taking it pro-rata from all funds.
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It is important to remember that a 401k is not an investment. It is an account that contains a particular investment. So, the answer to this question depends on the investment within the 401k. There are a couple of popular investment types that claim "insured" status. First, stable value funds ge…
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K usually means 1,000 so 401k would be 401,000. Generally, Americans speaking of a 401k, speak of a retirement plan. Simply it is the tax code - think of it as an outline numbering - 401 is the 401st section and "k" is the subsection number/letter. The K doesn't stand for anything that starts with…
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Yes it is income, plus you will be assessed a penalty.
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The annual compensation limit for 2010 401k's is $245,000. This generally means that match amounts may be limited to the match rate multiplied times the compensation limit. Contribution limits for 2010 are set at $16,500. However, contribution limits for individuals 50-years old and older get an ex…
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The maximum 401k contribution limit for 2008 for individuals aged 50 or over remains unchanged at $5,000. You can also get the the chart of 401k contribution limit or 401k limits for the current year at http://www.401kgps.com/contribution-limits.aspx. 401k Gps is an invest advisory firm, based in U…
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You can rollover a 401k to any type of IRA account that is geared towards retirement. (Education IRA's do not apply). A simple IRA is no different, and you can do a direct rollover to this account without incurring any type of taxes or penalties. However, use caution when doing the transfer, as you…
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The fact that it is a 401k check is irrelevant in determining a hold. It depends on your account history, the bank the check is drawn upon (same bank as yours or another bank; local bank or non-local bank), and whether the bank feels it would have other reasons to hold the check as permitted by gove…
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That depends on what you mean by making someone participate.401(k) plans are a special kind of profit sharing plan. From the perspective of the IRS, once an employee is eligible for a profit sharing plan, and has passed the plan entry date, that person is a participant in the plan even if no money i…
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There is a limit on the amount of elective deferrals that you can contribute to your traditional or safe harbor 401(k) plan.The limit is $16,500 for 2010.The limit is subject to cost-of-living increases after 2010.Generally, all elective deferrals that you make to all plans in which you participate …
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For Bank Only
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Early withdrawal penalty of 10% on the taxable amount of the early withdrawal distribution amount when you are under the age of 59 1/2.Unless you meet one of the exceptions to the early withdrawal penalty amount.
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Distributions from your 401K after you reach your retirement age the taxable amount will be subject to federal income tax at your marginal tax rate and may be subject to some state income tax.
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You cannot transfer your UK pension to a 401K. However there are QROPS (Qualifying Recognised Overseas Pension Scheme - See related link below) available for residents of the USA. These Qrops meet the strict reporting requirements of the IRS and transfers to these schemes have the approval of the IR…
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By withholding I will guess that you mean the amounts that you are contributing to your 401K BEFORE income taxes (deferred compensation amount) that will not be subject to the income taxes during the year and will reduce the amount of your taxable gross wage amount that is reported in box 1 of your …
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The deferred contribution amounts will NOT be included in your the box 1 of your W-2 form as taxable income for the year that you do this.The distributions amounts from the deferred compensation plan 401K will be subject to income in the future when you retirement at your normal retirement age and b…
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401k's are not tax-deductible in the normal sense of the word. However, since normal 401k contributions are made with pre-tax funds, taxable income is reduced. As taxable income is reduced, tax is then reduced as well.
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YES the taxable amount of the distribution is added to all of your other gross worldwide income on your 1040 federal income tax return and taxed at your marginal tax rate.If you are under the age of 59 1/2 and you do NOT meet any of the exemption form the 10% early withdrawal penalty then the 10% ea…
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No, In financial accounting, assets are economic resources owned by business or company. A 401 is personal money account, so it does not fall under the definition.
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A money market account (MMA) and a 401(k) plan are not the same. The former is a type of savings account while the latter is an investment account. Some of the key differences lie in the type of deposits, or contributions, made, how the money grows, and whether or not withdrawals can be made from th…
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When an individual has front loaded his contributions to the 401k and has reached the maximum limits prior to the end of the calendar year. He has foregone the company matching on his contributions. The true-up feature, looks back to see how much the company should have matched had the employee not …
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I have done this more than once. I believe it took me abt 2 weeks to get the check. But this will probably depend on whomever your 40lk is being managed by. There is also a 30% fed tax penalty if you don't meet the age requirement for withdrawl. 20% is taken up front and the rest you are resp for pa…
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Yes.as long as you do not contribute more than your annual limit.
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The law (ERISA: see Dept of Labor) = within 15 days of payday. If you get a monthly salary, it should be paid in by 15th of the following month. If you get paid twice monthly, it should be paid by the date of your subsequent paycheck. Either which way, your employer is acting illegally. The whole po…
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You can not rollover your 401k to an IRA in your spouses name. Individual retirement accounts must stay in one person's name (yours), unless you were to pass away. At that time the monies would transfer to your named beneficiaries. For more information on the in's and out's of rollover IRA's, pleas…
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The taxable amount of the distribution will be subject to your marginal tax rates when the taxable amount of the distribution is added to all of your other worldwide gross income after your income tax return is completed correctly you will know how would be owed on the taxable amount of the distribu…
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Yes. But it is much better and no taxes will be withheld if you have the trustee do a direct transfer from the 401K trustee to the IRA trustee and you do not receive any of the funds in your hand.
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Sort of... Employers (generally regarded as highly compensated employees) are often not eligible to participate in the plan until the "non-highly" compensated employees contribute. To encourage the non-highly compensated employees to contribute to the plan, employers (or highly-compensated employe…
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The EIN number for Prudential is found on the tax forms. If it is not there, the accounting office for Prudential should be contacted as no one else is authorized to release that information.
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Call your 401k recordkeeper (Fidelity, Vanguard, etc). If you don't know who your recordkeeper is then call your Benefits Dept or HR Dept and they can tell you.
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employer rate match
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It is possible that you could. 401k's have what's called a vesting schedule. All that means is you have to wait a certain amount of time to actually own the employer's contribution. Some matches are yours from day one. Most plans aren't like that though, so I would read through the info on your own …
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No. Your consequences for the overpayment will be reported and you will have to file an amendment for the year in which the overpayment occurred.
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Generally withholdings for 401k's are tax deductible, and is already calculated on your W-2. Depending on your income level, you may receive a nonrefundable saver's credit for your retirement contributions.
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Yes, you will receive a 1099-R for and IRA Rollover. Don't forget to attach to your taxes.
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The standard withholding on all withdrawals for 401k plans is 20%. There are two exlcusions to this and that is Required Minimum Distributions and Hardship Withdrawals. In addition, some plans also allow you to choose your withholding amounts on installment payments. Therefore, you can elect to have…
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401K accounts are regulated by the IRS. Typically, you're not able to withdrawal the funds in the account unless you're 59 1/2 years old or terminated from the employer you established the 401K with. Some 401Ks allow you to take a hardship withdrawals. The criteria for the hardship withdrawal is typ…
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The penalty for early withdrawal of a 401K account is 10%. There are a few exclusions to the penalty, such as:Attainment of age 59 1/2.Age 55 when terminated.Permanently disabled.Monies are indirectly rolled over.Monies were used for medical expenses.If the account is paid out in installments.If you…
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minimal assistance from gov
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No - When you're completing a rollover to a new plan, whether it be an IRA, 403B, 457, or 401K, it is considered to be a "Lump Sum Distribution" of the account. When you take a "Lump Sum Distribution" it automatically defaults the loan on your 401K. "Default" means that it is reported to the IRS as …
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16500 Looks like the IRS just released the 401k max contributions for next year. Unfortunately they're staying the same at $16,500. Inflation is to blame, or rather lack thereof. Which is too bad for all us prodigious savers!
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The maximum pre-tax contribution to the 401k is $16,500. If you're over the age of 50 you're able to contribute an additional $5,500 as a catch-up contribution.
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Yes. When you obtain the age of 70 1/2 years old, the IRS requires that you begin taking portions of your account balance depending on life expectancy. (This is referred to as your RMD or Required Minimum Distribution) Your plan's record keeper will typically send you notifications in the mail to le…
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402g Limit is $16,500. Catch-Up contribution limit is $5,500.
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Yes, a 401(k) plan may be seized by a judgment creditor after a civil lawsuit even though you personally are not entitled to take the funds out without a tax penalty. If the 401(k) is seized, you will probably have to pay the taxes and penalties just as if you had taken out the funds yourself and us…
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Some companies have what is called "Automatic enrollment." Basically, with in so many days of your hire date they automatically enroll you into the 401k plan and place you in a default investment. You have the option to opt out of the automatic enrollment but, you do not have the option to "forbid" …
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Yes. One of the exclusions to the 10% penalty is if you're receiving these monies as a beneficiary or a QDRO recipient. (QDRO - Qualified Domestic Relations Order. Recieved from a divorce settlement.)
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They have no affect.
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December 31, 2009.
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You should have $260,000 in when you are 40.
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In some states your unemployment benefits would be offset by the disbursement, especially that part of it which was contributed to by your employer. This is generally done in the week received against the week you got benefits. <><>This depends on what state you work in. Some are very l…
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