short answer why are small business 401ks so expensive
This is a much shorter version of a way too long tutorial I did where a detailed explanation of why small business 401k's are so much more expensive to participants and to providers than larger businesses 401 K and indeed they are more expensive from my book of benchmarkes where I can benchmark your plan expenses and performance if you are contributing to a 401k sponsored by small business your expenses average 1.5 percent of plan assets each year. So for every thousand dollars you have in the plan fifteen dollars every year.
Get taken out to cover plan costs one way or another you and most of the time you don't even see those payments and you don't know where to look all you know is by the time you retire you're hundreds of thousands of dollars behind what you'd be you have been putting that money into a large business 401k If you want proof that lowering plan fees by one percent will save hundreds of thousands of dollars by the time you or your participants retire click here. OK. Here's the answer.
Why small business401k's are not nearly as good a deal because small businesses don't have any employee whose only task is negotiating fees and services the boss is busy HR departments busy and if there's a benefits expert in the HR department they're busy with health care benefits. Usually small businesses end up going to an expert you don't always get from the best deal the experts sell small businesses a supposedly FREE PLAN but the participants get a menu of funds that don't have very many good choices the expense ratios in those funds pay commissions.
Back to the experts the stockbroker the adviser the 401k company the insurance company whoever sold you that planned and these experts make the solution seem more complex than it has to be like they're the only way to get you through the minefield they tell you all the horrible things that can happen instead of giving you lowcost ways simple ways to avoid the minefield That's why small businesses need a 401k advisor like me, a FEE ONLY adviser who gets no commissions to help negotiate a 401 k plan to help design.
401 k plan that has much lower fees that don't leech out each participants accounts every year on my example if you want to see a play and 0.5 0.6 percent range, a full percent lower than average. The average is not good plus I offer more services for that price I don't just compete on price I compete on bringing large company services to small company 401k's it's not that hard to migrate to a better plan it'll save you money very first year a good plan administrator can make those conversions troublefree.
So it doesn't take a lot of Your time. it's not that complicated A plain 401 K doesn't have to pick you through a minefield I pick out and service a plan design and providers that don't go anywhere near the minefield thanks for watching this tutorial if you questions about this tutorial my other tutorials or plan costs in general give me a call or if you want watch much longer tutorial where I go into to much greater detail where smaller plants get um. um not as good a deal. Thanks for watching.
Personal Finance 401k About 401k Contribution Limits
My name is Phillip Beningoso, I'm an investment professional, and I'm going to be discussing 401K contribution limits. It's important to keep your eye on what amount that is allowed for your 401K contributions. There are two different 401K contribution limits that you're going to really need to be aware of. The government sets the limit allowable, and an employer sets their own 401K limit. So, let's talk a little bit about both. The U.S. government imposes a 401K contribution limit guideline. Okay, the government is beginning to understand the importance of saving for retirement, and has started to increase that limit each year.
To help people save more money. Now the limit for 2008, 401K contribution limit is fifteen thousand, five hundred. And they also have what's called a catchup contribution feature, which is for those over fifty years of age, and that is five thousand additionally. Now, check with your employer to find out their contribution limit. This is very important. Any information provided here is for general informational purposes only, and should not be considered an investment advice or personalized investments. Any strategies or investments mentioned here may not be suitable for everyone. My name's Phillip Beningoso, and I'm an investment.
Should I Roll My 401k To An IRA
A question we're commonly asked is should I roll my 401k into an IRA There are many reasons why it makes sense, but there are also circumstances where is does not. If you choose a rollover, you can continue taxdeferred growth, open up more investment choices, possibly choose a Roth account, and consolidate your assets. However, you can't borrow against your assets, fees may be higher and custodial fees may apply. If you remain in your current 401k plan, you can always move to a selfdirected IRA later, and can potentially defer required minimum distributions past age 70.
With this option, however, you might have limited investment options. You may not be able to take a loan, and you might also need to transfer the assets if the account is less than $5,000. Staying in your 401k means it's possible to rollover to another employer's plan. If you rollover to a new 401k, may be able to borrow, will have protection from creditors, and can begin withdrawals after age 55 if you're retired without penalty. As you can see, a lot needs to be considered before making a decision, and an experienced financial planner can help.
Borrowing From 401K to Reduce Your Debt Good or Bad Mint Good Credit Tips Tutorial
Question comes from Max on Mint's Facebook page, and this is Max's question What's the formula to determine if it makes more sense to pay down credit card debt normally or to borrow from your 401k to pay off that credit card debt Max, here's my opinion on that issue. Your 401k is your nest egg. It's the war chest that you're going to build over the entire time that you're working so that someday you can retire and live off of it. Taking money out of a 401k to pay off credit card debt.
Finance Investment Tips Penalty for Cashing in a 401k Early
This is Patrick Munro discussing what is the penalty for cashing in a 401K early. A 401k is a governmental retirement program designed to allow working employees to put away money for retirement and not pay any taxes on the growth of that money. It's a privilege to have a 401k, the government grants you the privilege and if you don't have to pay taxes on the money, it will grow even quicker. However some individuals have, basically have problems with their cash flow and they have to collapse their investment. And if they do so before.
The age of fifty nine and a half, the government then will give you a penalty upon your money for the withdrawal. It's based on your taxable rate as well as a pure ten percent penalty over and above what you take out. So it's a very large penalty and definitely not want to tap your 401k as an emergency cash resource, because it will not only put your retirement funds back but it will actually cause you to lose money. So that's very important as to make sure you build money for your retirement future. This is financial adviser Patrick.
Choosing the Right IRA for You Wells Fargo
Music gtgt NEDAccording to a recent survey, what percentage of people age 2232 claim to have no savings for retirement A. 23 B. 51 C. 77 D. 11. In just a minute, I'll show you the answer. So, here you are. You've landed the great job that you always wanted. Your career is underway, and you're finally starting to earn the kind of money you were hoping to. If you're like me, it's pretty tempting to go out and start getting the things you've been dreaming about a new car, clothes, maybe the new tablet that just came out, and.
A retirement account I know you're too young to think about that, right Well, maybe not. I mean, sure, there are a lot of things to do before you stop working, like paying off your student loans, for example. But if you start saving now, things could be a whole lot easier down the road. One easy step you could take is to open an IRA. This would allow you to start putting some money away, and have it grow, tax deferred. And that taxdeferred growth can really add up over time.
Here's how if you deposited $5,500 in an IRA at age 30, then deposited the same amount every year for 30 years. Assuming a 6 return and a 25 tax bracket, your money would grow to over $460,000 in those three decades versus about $350,000 in a taxable account. That $110,000 dollar difference makes for a pretty different kind of retirement even after accounting for taxes you may pay on that money when you withdraw it. So you've seen the difference taxdeferred earnings in an IRA can make over the long.
Haul. Now you need to consider which IRA is best for you. There are two kinds the Traditional IRA and the Roth IRA. In a Traditional IRA, your contributions may be deductible on your tax return and you'll generally pay taxes when you make withdrawals in retirement. With a Roth IRA, you make contributions with money you've already paid taxes on after tax so withdrawals are taxfree in retirement, provided that certain conditions are met. The amount of money you can contribute to either type of IRA is $5500 per year and.
You can split your contribution between the two but the combined total can't be more than the annual limit. There are also a few other rules you'll need to know about these IRAs, so it's always a good idea to have a conversation with a financial professional to get the details that will will help you decide which account is the best fit for you. Ask friends and family members for ideas on who they'd recommend to give this kind of advice. And here's the real irony the start of your career is really the best time to start preparing.
For the end of it. Regardless of which IRA you choose, if you start putting away money now even a little bit, the power of tax deferred growth and compounding interest will help you to live the kind of retirement you'd like down the road. So, what percentage of people aged 2232 claim to have no savings for retirement The answer is B 51 of people 2232 claim to have nothing saved for retirement. So start saving now. I'm your host for My Financial Minute. Check back often to continue the conversation.
Personal Finance 401k How to Withdraw 401k Money With No Penalty
My name's Phillip Beningoso, I'm an investment professional, and I'm going to be discussing how to withdraw 401K money with no penalty. Many employers encounter the issues of whether to withdraw 401K money to pay for large expenses. Investors may need to pay off credit card debts, make an emergency purchase, or starve off hardship as defined by the Internal Revenue Service. There are several ways you can withdraw 401K money with no penalties, as long as you stay within the federal regulations. Let me take you through a few quick steps here, that.
Can make this process quick and painless. Step one, wait until you have reached the minimum age for withdrawal to take out 401K money with no penalty. If you take it before that time, you can take up to a ten percent penalty on top of any type of taxes that you would have to pay. Two is to request your old 401K fund from past employers in the form of a check. Three, utilize a Roth 401K through your employer for flexible withdrawal policies. Four, take out a loan from your 401K to avoid penalties associated with early withdrawal.
Five, to use your 401K without penalty, if you use funds to prevent hardship at home. And again, you'll have to follow the guidelines of the federal government and your employer. Six, seek advanced education by taking out a loan from your 401K, or, seven, pay off medical bills not insured by your employer's plan for principle from your account. The information provided here is for informational purposes only, and should not be considered an individualized recommendation or personalized investment advice. Any investments or strategies mentioned here may not be suitable for everyone. My name's Phillip Beningoso, and I'm an investment.
Ask Fidelity What To Do With My Old 401k Fidelity
Ask Fidelity What To Do With My Old 401k Fidelity,In this tutorial, Sarah Walsh, VP of Retirement Solutions at Fidelity answers the retirement question, I just got a new job. What should I do with my old 401k.
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