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IRS Trouble Solvers ™ ®
108 W. Schick Road, #370 Bloomingdale, IL 60108
www.IRSTroubleSolvers.com 630-832-6500 | 877-4-IRSLAW
INSIDE THIS ISSUE
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National Hobby Month
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The Lost Art of the Thank-You Note Tax Liability 101 Chicken and Leek Filo Pie
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January Win of the Month
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Contributions, Value Plans, and Withdrawals, Oh My!
3 FACTS MOST PEOPLE DON’T KNOW ABOUT 401(K)S We’re Not at Work Anymore, Toto
Stable Value Funds When you are close to retiring, you may want your retirement money to be in a safe investment option. Many 401(k)s offer stable value plans you can choose from. Stable value plans are beneficial because they pay higher interest rates than bank savings. They won’t fluctuate like stocks, and they shouldn’t go down in value if interest rates rise. How much you keep in a safe investment depends on how close you are to retirement and how much you will withdraw. Ages 55–59 Penalty Exemption Most people think there will be a 10% early withdrawal penalty tax if you withdraw from your retirement account before the age of 59. But there are some exceptions to the rule. Provisions in 401(k) plans exist for those who leave their employer after they reach the age of 55 but before the age of 59. This allows you to take withdrawals that are exempt from penalty taxes. Keep these facts in mind as you prepare for retirement, and if you are beginning your career at a new business, see what types of 401(k) plans your company or preferred investment fund offer.
When the tornado of a busy career finally slows down, and you’re on the yellow brick road heading toward retirement, the last thing you want to feel is lost — and that’s where 401(k)s come in. You must begin withdrawing from your 401(k) when you hit the age of 72, with some exceptions. Here are a few important facts about 401(k)s to keep in mind as you start preparing for your retirement. Roth Options Like traditional 401(k)s, Roth 401(k)s also take contributions. But Roth contributions are made with after-tax dollars instead
of pre-tax dollars. Since you are using after-tax dollars for your contribution, you can withdraw money in retirement tax-free. Unfortunately, only half of employers offer Roth 401(k)s. Even if you opt in for the Roth 401(k), your company match will be made pre-tax. If your employer doesn’t offer 401(k) plans, you can open a Roth IRA on your own.
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630-832-6500 | 877-4-IRSLAW
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