401K Retirement planning and what you should know
Planning for retirement can be overwhelming, especially when it comes to managing your 401K. However, understanding the basics and having a solid plan in place can make all the difference in ensuring a comfortable retirement.
At CMA Health and Income, we have a brief video explaining the intricacies of 401Ks and 401K rollovers. Watch it to learn more and get started on the path to securing your retirement.
A 401K is an employer-sponsored retirement savings plan that allows employees to save for their retirement years. The contributions are tax-deductible, and the funds in the account grow tax-free until withdrawal. However, with the volatile nature of the market, many people are concerned about their retirement savings.
If you're looking to make a change with your 401K, there are several options available, including annuities, IUL, and IRA. Each of these has its pros and cons, and we'll help you navigate them to find the best option for your specific needs.
Annuities
An annuity is a contract between you and an insurance company that guarantees you a steady stream of income in retirement. Annuities are a low-risk option and offer a steady stream of income, but they also come with fees and restrictions.
Indexed Universal Life (IUL)
An IUL is a life insurance policy that includes a cash value component that can be used for retirement. IULs are flexible and offer tax-free withdrawals, but they also come with high fees and restrictions.
Individual Retirement Account (IRA)
An IRA is an individual retirement account that can be opened with a bank or financial institution. IRAs offer tax-deferred growth and a wide range of investment options, but there are contribution limits and restrictions.
As a retiree, you may have heard of the term Required Minimum Distribution (RMD) before. It refers to the minimum amount you must withdraw from your retirement accounts, such as 401(k)s and IRAs, once you reach the age of between 73-75. Failure to take the RMD could result in a hefty tax penalty, so it's crucial to know what you're dealing with.
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