IRAs & 401(k)s
Your retirement income rests on what has been referred to as a three-legged stool — personal savings, employer-sponsored pension plans, and Social Security. Here's where you'll find instructive planning help on the first two of those legs.
| Annual Contribution Limits | For 2007 | For 2008 |
| Maximum 401(k), 403(b), 457 plan contribution | $15,500 | $15,500 |
| IRAs (deductible, nondeductible, and Roth) | $4,000 | $5,000 |
| If age 50 or older, you are eligible to make additional "catch-up" contributions up to the following limits: | For 2007 | For 2008 |
| 401(k), 403(b), 457 plans | $5,000 | $5,000 |
| IRAs | $1,000 | $1,000 |
"How do I Upgrade in my 401(k) account?" It's one of SMI's most commonly asked questions. Here's a step-by-step walkthrough of how to apply Upgrading within your company retirement plan account.
401(k)s are helping make Americans wealthier than ever. At one time, T. Rowe Price, the big mutual fund company, had over 300 employees who were 401(k) millionaires! Workers increasingly recognize that their 401(k) plan can make them rich. Unfortunately, many people currently participating in 401(k)s don't understand them. Squeezing the most performance out of your 401(k) is easy if you know how. And knowing how means knowing what your 401(k) plan is all about.
Tax time is also IRA time, as many taxpayers turn their refunds into IRA contributions. But many people fail to fund an IRA because they have unanswered questions. Is an IRA better than my 401(k)? Should I open a Traditional IRA or a Roth IRA? What about rolling my 401(k) into an IRA? Or converting my regular IRA into a Roth? We answer these questions and explain how to take full advantage of this tremendous retirement savings vehicle.
Lurking in the portfolios of millions of investors is a time-bomb threatening their financial security. This threat comes from the most unlikely of sources: your employer's stock. We explain the risk and offer guidelines to determine how much is too much.
If you're self-employed or own a small business, you know there's no fancy company pension waiting for you when you retire. However, there are solid retirement plans available to small businesses which can help you save. We explore 7 of the most common types, and offer help deciding which is best for your business.
You don't have to work in Corporate America to have access to a good retirement plan. Most federal employees also have a solid plan at their disposal—The Thrift Savings Plan. With generous matching provisions and solid, index-fund investing options, it's well worth every federal employee's while to take advantage of the opportunity the TSP provides.
Making too much to be eligible to contribute to a Roth IRA? There's a back door you can sneak through — but also a potential pitfall to be aware of.
Most investors are aware of the tremendous advantage tax-deferral within an IRA can make over their lifetime. But far fewer realize that a single simple step can extend that powerful tax advantage long after their death, potentially providing family wealth that could last for generations. We explain how in this discussion of "stretch" IRAs.
Funding an IRA is one of the best ways to build your retirement savings. But with virtually every financial institution offering to set one up for you, how do you know what the best options are? We report on the IRA terms being offered by several popular candidates favored by SMI readers.
SMI is a strong proponent of diversifying your portfolio. But what do you do if your 401(k) plan only offers a small number of fund choices? We've developed a fallback plan worth considering.
How should you choose between funds in your 401(k) when the selection is limited? New research indicates a relatively simple, yet very effective, solution may be within reach.
Many workers have access to a 401(k) or other retirement savings plan through their work. Most are also allowed to fund an IRA on their own, if they so desire. Unfortunately, it's not always clear which of these two vehicles is the better choice. We break down the pros and cons and offer suggestions on how to decide between the two.
If you think the new Pension Act recently signed into law doesn't affect you because you don't have a pension, you need to take a closer look. Not only does the new law impact employer retirement plans, like 401(k)s, it may make a significant impact on your personal savings as well.
Which is better to keep in your IRA/401(k), stocks or bonds? If you have both taxable and tax-advantaged retirement accounts, this question could have significant financial implications. But don't blindly follow the conventional wisdom, because the right answer depends on your investing strategy. We'll steer you to the most profitable course for your unique investing plan.
What if you could combine the tax advantages of a Roth IRA with the less restrictive limitations and ease of use of your company 401(k) plan? In 2006, that combination finally becomes a reality.
Having a brokerage window in your company retirement account is a tremendous benefit, and one you'll almost certainly want to take advantage of. But the timing of your new investments can be problematic in such a setup. We offer our suggestions on how to handle this situation.
You need a loan. Your 401(k) has plenty of money in it to cover the need. Why not borrow from your plan, then pay yourself back with interest? Beware — this convenience comes with hidden price tags attached.
One of the most important, and irrevocable, financial decisions many people ever face is how to receive their money from a company retirement plan. Here's a simple three-step process to help you evaluate this crucial decision.
Switching from decades of accumulating a retirement nest egg to actually living off of that savings is a tricky transition for many retirees. To make it simpler, some of the larger mutual fund companies are introducing new products that offer to manage the process for you. We evaluate whether that's an offer you should accept, or if you're better off handling it on your own.
What is a stable value fund, and is it a good choice within my company retirement plan?
