Early Withdrawal Penalty

When you are leaving a job where you have contributed to a 401k plan, you have three options: cash out your 401k, keep it in your current plan, or move it to another qualified retirement account. A qualified retirement account could be your new employer’s 401k plan, a Traditional IRA, or a Roth IRA. The [...]

I came across “Chase Hiked My Minimum Payment To 5 Percent!” on The Consumerist today. This is bad news for Greg and his wife, because this hike increase their minimum payment $558 to $930 — which causes them significant financial stress. Although I sympathized with the dilemma that Greg and his wife are facing, I [...]

In this Ask The Expert With Larry Swedroe article, Erin from Working for Financial Freedom wants to learn more about contribution limit for Roth 401k.  She also wants to know if and how she should split her investment between traditional 401k and Roth 401k.  Here’s the question from Erin:

Is there a limit to how much [...]

It’s tough losing your job. Unfortunately, it’s that much more possible in this economic recession. There are many things to do when you get laid off; one of them is deciding what to do with your 401k. When you are laid off, you have the choice of leaving the 401k funds in your current plan, [...]

The financial terms below are commonly used throughout this web site.  Clicking on a term will send you to the term page with a brief definition and a list of articles related to the term.

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A
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401(k)
529 Plan

Adjustable Rate Mortgage (ARM)
Alternative Income
Annual Percentage Rate (APR)
Annual Percentage Yield (APY)
Annuity
Arbitrage
Asset Allocation
Asset Location

Bond
Bond Fund
Budgeting

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Capital Gains
Certificate of Deposit (CD)
Commodities
Contribution Limit
Correlation
Credit Report
Credit [...]

Now that we know Obama is the next president, we can evaluate his proposal regarding 401k plan more closely.  If you recall from my last article, I didn’t like his proposal that would allow people to early withdraw from their retirement funds — i.e., 401k and IRA — without penalty (McCain’s plan was even worse). [...]

With the current economic crisis in full swing, it’s easy for us to fall into the recency bias trap.  In psychology, the recency effect is the tendency to remember more recent events or observations more vividly and give recent information more weight than historical information. Unfortunately, this recency bias could cause you to abandon your [...]

A friend of mine is hit hard by the 40% plus drop in his 401k and the daily gyration haven’t made it any easier.  He was seriously considering cashing out of his 401k and stop contributing altogether.  After a long conversation with him, I was able to explain to him why this was a bad [...]

In face of the current economic crisis, both Obama and McCain are proposing changes to the IRA and 401k rules hoping that it will help restore economic stability.  Although we usually take these retirement plans as certain, we are reminded that rules governing IRA and 401k are malleable and not set in stone.
Obama’s Proposal Versus [...]

A friend at work is thinking about borrowing from his 401k plan to fund his business start-up. He mentioned it to me and I told him that it’s a terrible idea to borrow from 401k. It may sound appealing at first — i.e., fast loan application, easy to qualify, and you pay the interest to [...]