Happy National Retirement Security Month!

Retirement
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Since October is National Retirement Security I thought I would share 5 ways how to show your 401(k) some love and spread the retirement security all around:

  1. Enroll! A study from T. Rowe Price showed that among those making $25,000 or less, 401(k) participants saved 10 times more on average than peers without access to a plan and 20 times more than those who have access to a 401(k) but choose not to participate.

  2. Take full advantage of any company match. Not doing so leaves money on the table!

  3. Find out how long until you’re fully vested in your contributions. Most companies require you to stay 5 or 6 years before you get to keep all of those matching contributions. Staying that extra one to two years can potentially add thousands toward your retirement.

  4. Don’t withdraw early! Withdrawing before the age of 59.5, will incur a 10% early penalty plus the income tax on the withdrawal.

  5. Apply to the 401(k) Champion® Award! This is the only type of award that celebrates 401(k) participants who optimize their 401(k)s and encourages others to do the same. Winners can win up to $1,000! Apply at https://401kchampion.com/

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wow thanks for sharing

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Who wouldn’t love an extra boost of cash just for being an active participant in their 401K plan!

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Back again w/ more 401(k) FAQs for National Retirement Security month:

Q: If your employer contributes to your 401(k), will your W-2 income go up?

No, and that’s a good thing. Employer contributions are pre-tax, which means they are not included in your W-2 as taxable income. For example, if your employer contributes $5,000 and your salary is $50,000, your W-2 will show income of only $50,000, not $55,000.

That’s a clear benefit for you at tax time. It’s like getting a bonus that is not taxed.

Q: Do you have to do something to get an employer contribution, assuming your plan offers one?

Step 1. Participate. Step 2. Contribute. Step. 3. If you have that type of plan, study how the match works, including the vesting schedule.

Q. If you are a 401(k) participant, why aren’t you competing in the annual 401(k) Champion® Award?
This is the only type of award that celebrates 401(k) participants who optimize their 401(k)s and encourages others to do the same. 3 winners win $1,000! Apply at https://401kchampion.com/

If you are a nonparticipant, find out more about your 401(k). Are you sure you are making the right decision by not doing so?