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401k & IRA Rollovers

How To Rollover A 401k

Reasons To Rollover A 401k

Roth IRA vs Traditional IRA Rollover

Reasons To Not Rollover A 401k

Average 401k Balance By Age

Types Of IRAs

Taking Withdrawals from a 401k

401k to IRA Rollovers

401k Rollover – Quick Start Guide

Questions about 401k Rollovers?

Questions about retirement?  After you’ve explored your options, you may still have questions about what to do with your retirement plan money. We are the areas IRA specialists! 

Benefits of a 401k

Contributing to a 401k as soon as possible can be a small act with significant impact. Consider this analysis of the average 401k balances by age, which shows the long-term payoff of compound interest and disciplined 401k contributions.

401k savings can support your retirement plan with several key benefits along the way.

401k Tax Advantages

Traditional 401k plans are tax-deferred. This means that you don’t have to pay income taxes on your contributions. You can contribute up to $19,500 annually as of 2021.When you retire, all withdrawals you make are treated as regular income; you pay income tax according to your income tax bracket for that year.

401k Employer Match

Your employer may match your 401k contributions on a percentage basis. This is the same thing as a guaranteed, no-risk return on your investment.

Employer-Sponsored 401k Plans

For most employees, a defined contribution plan like a 401k is one of the primary benefits offered by their employer. Employer matching of your 401k contributions means that your employer contributes a certain amount to your retirement savings plan based on the amount of your annual contribution.

Specific terms of 401k matching can vary widely. Your employer may use a very generous matching formula, or choose not to match employee contributions at all. Additionally, not all employer contributions to an employee’s 401k plan are the result of matching. Employers may make regular deferrals to employee plans regardless of employee contributions, though this is not particularly common.

Make sure you check your employer’s plan documents for the details on exactly how your 401k works.

Leaving your job is another time to consider your 401k. During this big life transition, you may want to consider a 401k rollover. This could help you avoid higher fees and get more investing options.

Making the Most of Your 401k

If you’re falling short with your current savings, don’t fret. It’s not too late to get on track.

Here are a few avenues for making improvements to your retirement plan.

  1. Maximize your savings rate by contributing as much as you can afford (and as much as is allowed by law). There is a compounding effect to investing. As your assets appreciate over time, all future gains are based on that larger base. The longer you can take advantage of that compounding effect, the better.
  2. Contribute at least as much as is required to receive your employer match. If you don’t, it’s like ripping up a paycheck. That match is part of your compensation as an employee – don’t refuse it.
  3. Avoid taking early withdraws. Try to think of your retirement savings accounts like a pension. People working towards a pension tend to forget about it until they retire. While that money is locked up until later in life, it becomes a hugely powerful resource in retirement.
  4. Be honest with yourself about how much time you want to devote to learning about your 401k and organizing your financial goals. If you know you won’t spend enough time on your own 401k management, get to know a financial advisor who can help you with your 401k. You want to make sure you’re on track to meet your goals, and one of the best ways to do that is to have someone with experience show you the way. Personal Capital is able to directly manage investment clients’ 401k, 403b, and 457 plan accounts, as well as PSP and TSP account types.

Ask us about our complementary portfolio analysis and stress test.