Signs You Have a Bad 401(k) Plan and What to Do About It

Sometimes we’re just happy to be with an employer that has a 401(k) plan, since so many don’t.

It may not even seem important whether or not it’s a good plan or a bad one – at least not at the beginning.  After all, any 401(k) plan is better than having none at all.

But there are bad 401(k) plans out there, and that becomes even more important and obvious the longer you’re in one.

What are Some Signs of a Bad 401(k) Plan?

No employer match

One of the real incentives to invest money in a 401(k) plan is an employer match.

A typical match is 50%, where the employer contributes 3% of your income while you contribute 6% out of your compensation.  Employer matching contributions can be more or less generous.

Some employer plans provide no match at all.  In and of itself this does not indicate a bad 401(k), but in combination with other negative factors it’s a strong sign.

Poor or limited investment choices

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5 Strategies for Keeping the Peace When Parents Move Back in with Their Adult Children

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As much as parents love their children, some parents prefer that their grown children fly the coop and don’t come back to live. 

Having adult children move back in with you can be challenging and often requires that you establish firm boundaries and ground rules so both generations can live in peace under the same roof.

While much has been written about the boomerang generation, not much has been said about the reverse trend–parents moving in with their adult children thanks to an inadequate retirement or health problems.

If you foresee that there may be a day when your parents could potentially move in with you, it is important to begin preparing now, years before it may actually happen.

Here are some strategies to help keep the peace when parents move back:

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The Roth vs. Traditional IRA – Which is Best for You?

If you’re considering adding an Individual Retirement Arrangement (IRA) as part of your overall retirement plan, you may be wondering whether a Roth or traditional account will work better.

Depending on your circumstances, it could be either, or it can even be both.

What is a Traditional IRA? – Basics

Traditional IRAs allow you to save up to $5,000 ($5,500 for 2013) in a self-directed, tax deferred account.  You can also increase the amount of that contribution by $1,000 if you are age 50 or older.

Not only will this allow you to build your own retirement portfolio, but you can also contribute to an IRA even though you’re covered by another retirement plan.  However there are limits on the tax deductibility if you are covered by another plan.

For single taxpayers, the IRA deductibility begins to phase out with an income of $58,000 per year.  It completely phases out at $68,000.
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Using a Roth IRA as an Emergency Fund – Pros and Cons

Roth IRAs are by far my favorite type of investment holding account available.

I love the idea of setting aside $5,000 in after-tax money in order to never pay taxes on the amount ever again.

There are other perks to using a Roth IRA besides never paying income tax on your nest egg.  One of the most prominent: you can withdraw your contributions at any time, even before retirement.  (This isn’t recommended, of course, but it is possible.)  You won’t pay any penalty or taxes for withdrawing your contributions under normal situations.  You will pay tax and penalties if you withdraw your investment earnings, so never do this.

This unique withdrawal capability has some people counting on their Roth IRAs as an emergency fund.

But is this a wise choice or a fool’s gamble?

Should I Use My Roth IRA as an Emergency Fund?

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Roth IRA 5 Year Rule on Withdrawals

Roth IRA’s have become enormously popular in recent years especially with the conversion of traditional IRA’s to Roth’s.

Now that it seems as if nearly everyone has a Roth, let’s take a look at the rule’s withdrawals.  Sooner or later, we’ll all be doing it.

Before we get started, I recommend that you get advice from your CPA or tax advisor before taking any withdrawals from your Roth IRA. The rules on this are fairly complex and your individual circumstances will have a material affect on the outcome.

General rules on Roth IRA withdrawals

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5 Keys to a Frugal Retirement

When we think about frugality, many of us consider the here and now.

However, it doesn’t hurt to consider that you might need to be frugal during retirement as well.

While many of us hope to be able to forget about frugality during our golden years, the truth is that you never know what will happen in the future to create uncertainty in your finances.

It makes sense to be prepared to live frugally in retirement, if the need should arise.

Here are 5 things to keep in mind as you prepare your retirement finances:

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Don’t Let These 4 Things Hold You Back from a Successful Retirement

Each person’s idea of a successful retirement looks different from someone else’s.

However, no matter who you are, there are some things that can keep you from achieving your vision of retirement success.

As you plan for your future, be careful; don’t let the following 4 things hold you back from a successful retirement:

1. Insufficient Savings

If you aren’t setting aside enough for retirement, it will be hard to live the lifestyle you want.
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