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If you are living and working in the United States, you are definitely fortunate because you are capable of saving for your retirement and at the same time defer present income taxes on your saved funds and earnings until such time that you can carry out distributions or withdrawals. You can choose to place a portion of your wage or income to be directly paid or deferred into a 401k account, which is recognized as a contribution.

In actual fact, this retirement investing option is an employer-sponsored account. Your employer or company has the full discretion to grant you benefits as their employee by optionally selecting to match up part or all of your contribution by means of making additional contributions in your account or grant you with profit sharing benefits in your retirement account. Continue reading ‘401k Account – Are You Eligible?’ »

If you are changing jobs, you might have this question, “Do I have to rollover my 403b?” The answer is “no”. You don’t have to transfer the funds into a new account when you stop working for the school or charitable organization that you are currently with, but you might want to.

The rules for 403-b rollovers are the same as for 401-K retirement plans. If you are going to work for another employer that offers the same plan, you can transfer your old account into the new financial organization. Fees may be attached to the transfer, but they are typically minimal. Continue reading ‘Do I Have to Rollover My 403b?’ »

The 403b withdrawal rules and rollover rules are the same as those for a 401-k. There are certain things that you can and cannot do within the account. There are times when rollovers and withdrawals are non-taxable. There are other times when the entire account value would be taxed as regular income.

Here’s a quick look at what you need to do in order to avoid being taxed.

Withdrawals can be taken beginning at age 59 ½. If you decide to wait for a few years to allow the account to continue to grow, you can. But, once you reach the age of 70 ½, regular distributions are mandatory.
Only Roth accounts are exempt from the “mandatory distributions rule”.

But, contributions to a Roth account are taxed as regular income for the year in which they were made. For people that expect to pay more, or the same amount of taxes after retirement, the Roth account is attractive.

The 403b withdrawal rules and rollover rules have mostly to do with avoiding unnecessary taxes. Some people think that rollovers are safe from being taxed, but that is only true if the transaction is completed within 60 days. Transfers, on the other hand, are not reported to the IRS. Many financial institutions use the terms interchangeably and that can lead to confusion.

Continue reading ‘A Guide to 403b Withdrawal – Rules and Rollover Rules’ »