401k Planning on Long Island
It is never too early for you to start retirement planning, and a 401k is a strong way make sure you remain financially secure throughout your later years.
What is a 401k plan?
A 401k is a retirement savings plan, often sponsored by employers, that allows employees to contribute a set amount of salary to be saved for future use. The contributions may be deducted before or after taxes. Employers often make matching contributions to the plan, which may be subject to vesting options. This sets a period of time before the employee is fully vested in the plan. Once they are fully vested, the employee is entitled to all of the contributions the employer makes to the plan.
How is a 401k planned?
The 401k plan is usually invested according to an employee’s retirement planning preferences. For example,the employee might prefer a larger percentage of stock investments to bond investments. Percentage preferences can usually be adjusted periodically. Some 401K plans allow you to take out loans against them. The money or investments in a 401k plan can be moved. When you leave your job, you can transfer your assets or take your funds, which will be subject to taxation. Distributions are generally subject to a federal income tax penalty if you withdraw them before reaching age 60. You are usually able to roll over your assets into your new employer’s 401k or into an Individual Retirement Account (IRA).
Blair Insurance can walk you through each step of the retirement planning process and give you options to make sure you’re prepared for your financial future. If you would like to learn more on how to get started today, contact Blair Insurance for a free quote. And feel free to use our 401k calculator to assess where you’re at with your retirement planning.