Tuesday, April 27, 2010

401(K) Roundup, April 2010.

It's been way too long since I've caught up on my blog reading, and as I was doing so I discovered a couple of really good posts about 401(k) plans and retirement that I thought I'd share.

The first post is from Kyle at Amateur Asset Allocator titled, 401k Rollover Options:
A rollover of 401k funds from an account held by a former employer is almost always a good idea. There are several rollover choices available. The sensible rollover choice is not a one-size-fits-all option – estimated retirement age, marginal tax rates, ability to pay some taxes upfront, and earnings are all factors that must be considered.

He then outlines 4 broad types of 401(k) rollover types available to employees:

  • Rollover the funds to a Traditional IRA



  • Rollover the funds to a Roth IRA



  • Rollover the funds to your current employer’s 401k



  • Rollover the funds to a pension-type plan


Definitely worth a read if you have a collection of 401(k) plans from previous jobs, or if you're in the position I'm in and your employer has discontinued the employer match on contributions and you're wondering if 401(k) plans better than IRAs if there is no match?

Next up, JLP from All Financial Matters shares how he and his wife are
Taking a Look at Our Retirement:
This week I have been trying to take a long-term look at our finances by peering into the abyss that is retirement when we are 65-years old. It’s a scary undertaking because there are so many unknowns.

He gives a great breakdown of the figures he's using and the considerations in determining how much they will need vs. how much they have and whether it's possible to live the kind of retirement they want.

Can You Have a 401k and an IRA at the Same Time? is the question Madison answers at My Dollar Plan:
A few people that I’ve talked to recently thought that because they had a 401k at work, they couldn’t open an IRA. Not true! Let’s take a closer look at investing in both an IRA and a 401k at the same time.

And lastly, Jeremy at Gen X Finance would like to make sure you Don’t Treat Your 401(k) Like a Savings Account:
As a Chartered Retirement Planning Counselor and someone who deals specifically with retirement issues I spend a lot of time helping participants with their retirement plans. One of the most common reasons participants would meet with me is because they say need money and they are looking to take it out of their retirement plan.

Yikes!

I hate to say it, but it doesn't surprise me that people think this way. After all, how many studies have we seen stating that most people cash out their 401(k) plans when they switch jobs?

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