The high majority of Americans are familiar with the term 401k as many have and are contributing to one themselves; yet very few have an understanding beyond the term 401k, itself.
Some quick facts:
- A 401(k) is a tax-favored retirement savings account offered by employers
- Individuals can contribute up to $18,000 a year ($24,000 if age 50 or older)
- Some employers offer the choice of both a traditional 401(k) and a Roth 401(k)
- You can contribute to both a 401(k) and an IRA in the same year
- The biggest drawbacks of a 401(k) are plan fees and limited investment options
- If you leave your job, you can roll over your 401(k) money into an IRA
According to recent statistics from the Department of Labor, there were over 638,000 defined-contribution plans in the United States. Of all those plans, 80.4% were 401(k) plans, which covered 88.7 million total participants. About 73.7 million workers were active participants in the 401(k) plans.
Like many of those participants, you may be counting on your 401k to support you during your retirement years. You may also be concerned with just how close those “Golden years” truly are.
Have you ever sat there and asked yourself how much you really understand about your 401k? How it works? Or when you will be able to access your money?
Most Americans believe accessing their funds is not an option at all until retirement and they aren’t entirely wrong. The most common circumstances or situations that allow access to your retirement money, albeit few and far between are:
- Leaving current employer for new job
- Retiring from the workplace
- Getting divorced
- Becoming completely disabled
For many people who may be just a few years away from fully retiring, protecting & preserving their retirement savings is a big concern. Many pre-retirement savers would like to take control of their savings outside of there 401k, to not only protect & preserve but to control those monies in strategies not provided within their current plan. For most, money saved within a 401k will be relied upon for retirement income. If your thinking about retiring yet still have a few more years to go this strategy may be right for you.
With our experience and guidance from retirement-advice-law attorneys – An IRS provision within ERISA guidelines has been discovered that can change your retirement entirely!
It’s called an “In-Service Alternate Rollover” or ISAR – and it is a process which allows people to move current 401(k) savings without tax liability or a 10% penalty. With this newly discovered solution, you can move your 401k money while retaining your employer-matching incentives. Best of all, it is done without you having to change jobs, get a divorce or retire!
To learn if this strategy is right for you contact Scott Briggs at Retirement Planning Solutions of Michigan today at (800) 661-1819 or visit us on our website @ www.rpsmich.com
Scott Briggs, Founder & CEO of Retirement Planning Solutions of Michigan, is a Certified Senior Advisor as well as a Certified Member of the National Ethics Committee. Scott has over three decades of experience specializing in Wealth Management, Asset Preservation, Retirement Income, & Long Term Care.