Sometimes we cant avoid it but you should avoid these costly mistakes in your 401k to avoid penalties or taxes at all costs. Here are 4 tips to help you avoid these ridiculous fees.
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As you work to build your retirement nest egg, it’s important to understand the ins and outs of your 401k plan. One of the biggest concerns for many retirement savers is how to avoid penalties and taxes on their 401k. Here are four tips to help you navigate these issues:
1. Don’t withdraw money before age 59½: One of the easiest ways to avoid penalties on your 401k is to wait until you are at least 59½ years old before you start withdrawing money. If you take money out before then, you may be hit with a 10% penalty in addition to any taxes owed.
2. Consider a Roth 401k: Another way to avoid taxes on your 401k is to choose a Roth 401k option (if your plan offers it) instead of a traditional 401k. With a Roth 401k, you pay taxes upfront on your contributions, but you won’t have to pay taxes on the money you withdraw in retirement. This can be a smart strategy if you expect your tax bracket to be higher in retirement than it is now.
3. Review your plan’s fees: Fees can eat away at your retirement savings, and high fees can be especially damaging. Review your 401k plan’s fees and see if there are any ways to reduce them. For example, you may be able to switch to low-cost index funds or move your money to a different plan with lower fees.
4. Don’t forget about required minimum distributions: Once you reach age 72, you are required to take a minimum distribution from your 401k each year. If you don’t take the required minimum distribution, you could be hit with a substantial penalty. Make sure you understand the rules and plan accordingly.
By following these tips, you can help ensure that your 401k is working as hard as possible for you, and that you can enjoy your retirement years without worrying about penalties and taxes. Remember, it’s never too early to start planning for retirement – the earlier you start, the better off you’ll be!
So after you retired, and I'm age 65 older than 59 1/2 years old, will I pay taxes for 401k when I take it out… Does it depend how much you have in your 401k at time of retirement
I'm 58 1/2 years old. Want to withdraw $190000 from my 4001 k to pay off my mortgage and a loan I have with them. My 401k balance is $700000. I know I have a 10% penalty and 20% in taxes plus about 6.7% in state taxes. I will have $15000 cash (no mortgage payments) and $13000 cash (no 401k loan payments) for a total of $28000 a year to invest. Not a good deal? Well, that's assuming the stock market will crash soon and I will probably lose most of my money there.
I got a question: An old job cashed out my 401k way back in 2012 cause, it wasn't enough or something. They tried sending me a check back in 2012 which I never got cause I moved. I got them to reissue the check to me in 2019. I received and spent. How would this impact my 2019 taxes? Or do I file an amended 2012 return? Additionally, I didn't cash out my 401k money, my old job did so, shouldn't I be exempt from penalty?
Shit video. Infomercial about something we dont want information about. Dont bother watching
Hi my names Eli i am 31 yrs old and I’ve been thinking of closing out my 401k at some point in the future due to I work in the Texas oil fields and the oil field is a roller coaster to say the least. Anyhow I was planning on the next oil bust to take out my retirement and pay off a few debts. I’ve heard if I’ve been laid off from my job and I’m no longer with that company I can withdraw my retirement and avoid 1 of the 2 penalties.
Is this a bad idea???
A lesson for everyone, put in only 1% of your money until you are fully vested because you could get fired before you get your 2 years in to get the 20% minimum and then you have money tied up for nothing. Sit it out the vesting period only put in 1% and no not 3 years its 6 years dude. Only put in 1% till the vesting is over so if you get fired early you don't get screwed like i did.
Who gives a shit if you might not even live to 59 years old
Somebody help me real quick don't we all get 10 tax deduction but early withdrawal is 20 percent
What if you show a net loss of $100,000 for the year (let's say you lost money daytrading in the stock market), and then you cash out your 401k, which is valued at least than 100k. Since you still made no income for the year overall, do you still have to pay tax on the 401k?
Do they charge a penalty and fees for only withdrawing a loan or for withdrawing loan and for just taking money out of your 401k without it being a loan
You are awesome. Thank you for the advice. I’m looking to pull $2,000 from my 401k. Is that too low of an amount?
What if you lose your job and you withdraw only what you need to pay the expenses? For example,I withdraw $25k for the year and have no other income that year. What's the tax implications? This is just a hypothetical question and I am not looking for legal advice.
You said if your company doesn’t match open a traditional ROTH IRA why is that
Video starts at 1:25
Love your intro!
hi i'm 53 years and and lost my job what would be better for me to rollover my 401k into
You forgot to mention the 59 1/2 year old rule allowance.
How do you feel about 457b.
Thank you so much for the great information!!!