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Retiree looks to move 401(k) money to IRA

Retiree looks to move 401(k) money to IRA

Two years ago, I retired at age 55 after working for my employer for 38 years. I’m wondering whether I can roll my 401(k) money into an individual retirement account without incurring the 10% penalty. If not, I have heard that I can withdraw the money from my 401(k) in 5 equal installments. Is that true?

— Connie Conundrum

Dear Connie,
Early retirement is something to celebrate. You’ve already made many of our younger readers a bit envious.

Now that you’re ready to do some work on plotting your future, let’s begin. One of the first steps is determining your goal in moving your 401(k) plan funds. Are you trying to take distributions while avoiding the 10% penalty for early withdrawal? Or, do you want the money to increase investment options and control of the account?

Your 401(k) plan may give you the option to withdraw funds without penalty between age 55 and 59 1/2.

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Article By Dr. Don Taylor, Ph.D., CFA, CFP, CASL

It’s Never too Early to Think About Retirement

Most young Americans are poorly educated about financial planning, retirement and preparing for a life without work. Even if many 20-somethings don’t explicitly think or say that it’s too early to think about retirement, most act as though retirement is something to worry about later in life. However, if millennials learn to maximize their earnings potential, pay down debts responsibly and build good savings habits, it’s possible to live a healthy financial life – and maybe even retire a little early.

Retirement Planning in Your 20s
Young workers don’t know what kind of retirement they want or need, and even fewer understand their savings options. Most 20-somethings don’t make a ton of money and are busy with social life or trying to start a family. Increasingly, the high expense of higher education is leaving young Americans in a mountain of student loan debt.

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401(k) Or Roth IRA: Which Is Best?

Larry Light

The array of retirement accounts can be bewildering, especially for millennials just starting out. Two of the top choices are the workplace-oriented 401(k) and the Roth IRA. AdviceIQ Network member Mary Beth Storjohann, the founder of Workable Wealth in San Diego, sorts which might work best for you:

Most Gen Yers don’t know what types of retirement accounts to start with. I break down the pros and cons of two most popular ones – 401(k) and the Roth individual retirement account – to help you decide which is right for you.

This and more at The Independent Agent Network

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What Happens If You Fumble In Retirement?

I remember when I was a junior in high school and playing in the big homecoming football game. The stands were packed and as we entered the fourth quarter I went back to receive a punt. Back then, I was a sure-handed player with good speed and aspirations to play at the next level. However, none of that mattered when the punt slipped through my hands, bounced between my legs, and slowly rolled end-over-end, out of my reach as I was sandwiched by two opposing players running full speed.

It was physically painful and emotionally disheartening because the game was on the line and the other team just recovered the ball on our 20 yard line. As I pulled myself up, I had to make the 25 yard jaunt back to the sidelines. As you might expect, it seemed like a journey of a thousand miles that had nothing but bad news and angry sentiments waiting for me.

Have you ever found yourself in a difficult or painful situation like this? I was ashamed, embarrassed and felt like a failure because I had let myself, my parents, my classmates and even the team down. It suddenly didn’t matter that I had an interception earlier in the game or that I scored a touchdown the week before. I was quickly and unexpectedly in a deep dark hole that I never planned for.

Just as no player ever practices running back to the sideline with your head hung low in both guilt and shame, many people can experience the same thing when divorce, loss of loved one, sudden unemployment, or forced retirement shows up on their door step.

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Millennials’ Ticket To An Awesome Retirement

It may be hard for someone in their twenties or early thirties to start thinking about retiring, especially when there is so much interesting stuff to check out on Facebook, Instagram, or Twitter; but this is exactly the time that a Millennial should start preparing for retirement if one wants to have the chance to nail retirement without having to save a lot of money each year. Listen up, Millennials (or Generation Y, if you prefer): One Direction may sing “Live While You’re Young”, but if you started saving for retirement while you are young, then you can chill when you’re old.

The foundation of retirement investing is based off the concept of tax deferral. Tax deferral means that you can postpone taxes on any earnings you make on the money in your tax-deferred accounts. That means your money is growing each year without having to remove any funds to pay tax.

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Is China a threat to your retirement portfolio?

Plunging Chinese stock prices may have U.S. investors concerned about their exposure. But, for the most part, they probably don’t need to worry.

Advisors say many U.S. investors, especially those who have diversified, won’t feel a huge bite to their overall portfolio.

For one, most U.S. investors and mutual funds own shares of Chinese companies traded on the Hong Kong Stock Exchange, not the Shanghai Stock Exchange, said Patricia Oey, senior fund analyst at investment research firm Morningstar.

While the Shanghai Composite stock index, which tracks China’s benchmark stock market, dropped 8.5 percent on Monday, suffering its biggest daily loss since 2007, Hong Kong’s Hang Seng Index fell 3.1 percent.

Stay up to date with news and information like this to better serve your clients as well as yourself 

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More American savers skimp on retirement plans

Americans are saving more, just not in their employer-sponsored retirement plans, according to a new analysis by retirement market researcher Hearts & Wallets.

Average annual household savings increased almost a full percentage point to 5.5 percent last year, up from 4.6 percent in 2013, based on Hearts & Wallets’ annual survey of 5,500 U.S. households. (The personal savings rate this May was 5.1 percent, according to the latest release from the Federal Reserve Bank in St. Louis.) But the percentage of household savings that went into employer-sponsored retirements plans like 401(k)s fell 7 percentage points to 22 percent in 2014, and households participating in employer-sponsored plans declined to 56 percent last year from 60 percent in 2013.

“Our research shows that the average saver was more focused on building an emergency fund than saving for retirement last year,” said Laura Varas, co-founder of Hearts & Wallets. The percentage of households that said they set aside money to deal with unexpected expenses grew from 37 percent in 2013 to 45 percent in 2014.

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GE Saves 3.3 Billion from benefit cuts to employees

NEW YORK (TheStreet) —General Electric (GE – Get Report) booked $3.3 billion in savings last quarter by widening retiree-benefit cuts from salaried positions to hourly production jobs, prompting a backlash from former employees who believed a career with the company would guarantee a comfortable retirement.

The savings on retiree benefits is the largest for the Fairfield, Conn.-based company since the Affordable Care Act was passed in 2010. Starting Jan. 1, hourly production retirees who turn 65 by the start of 2018 will be cut off from GE’s traditional retiree health plan and, instead, reimbursed about $1,000 a year on the cost of Medicare coverage supplements purchased through Towers Watson’s (TW) OneExchange, the company said in a letter to employees. Current employees who retire by June 23, 2019, will be offered the same reimbursement.

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Retirement fear: Inflation


When you were a kid, did you fear monsters hiding in your closet or under your bed? You’re no kid anymore and new fears haunt you — such as running out of money in retirement after a lifetime of watching prices go up. You can still plan now to enjoy enough to spend as well as how to spend it.

People do feel slightly better about their golden years’ money these days, according to the latest Employee Benefit Research Institute survey on retirement confidence. More than one out of five workers are now very confident – though almost one in every four express little faith that they’ve saved enough, with future medical expenses being a major concern.

Nagging worry about what’s missing in our retirement plans can be very justified. Additional good news is that you can manage such fears.

You need to consider many risks in your planning process, especially the often-ignored creep of inflation. While a bad price spiral is hardly inevitable, a more muted pace of inflation remains a good bet. Best estimates put the coming years’ overall price jumps at about 2% annually — much as anyone can predict such a figure.

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Amid The Stereotypes, Some Facts About Millennials

Friends balance on pilings at the beach.

“Millennial” is the buzzword of the moment — with much of the national conversation focused on stereotypes and anecdotes. But are young adults today really all that different from those of previous generations?

A review of data shows that millennials do have characteristics that set them apart. Unlike their parents’ generation, millennials are ushering in an age when minorities will lead the U.S. population. Many of them aren’t too keen on marrying early. They are the most educated generation — but even so, a majority remains undereducated. And since they entered the workforce in the midst of a sluggish economy, many also remain underemployed.

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