Smart401k Blog

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Good news retirement savers! Starting next year, you’ll be able to contribute more to your work retirement plan.

The IRS raised the 2012 contribution limit to $17,000 for 401(k) investments, 403(b)s,  most 457s and Thrift Savings Plans. The $500 raise is the first lift to the limit since 2009. The reason for the increase is simple, inflation. The contribution limit, by law, adjusts for inflation and because we saw a rise in inflation, we see a higher contribution limit.

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Most articles about retirement planning focus on you – the future retiree. Oftentimes authors also discuss how spouses’ retirement savings will interact in a retirement strategy. Have you ever thought about how your retirement savings decisions will affect everyone else in your life?

Think about all your family, and even your friends. Your financial situation during retirement could be part of their lives too.  (more…)

Spring is here and that means it’s time to start preparing for those summer vacations.

But with rising gas prices, traveling long distances by car or airplane is becoming more expensive. The concept of a staycation – otherwise known as a stay-at-home vacation – isn’t new, but it’s seen resurgence during the past few years. Cutting back and saving money doesn’t have to be a downer.  (more…)

You’re faced with the task of amassing a large sum of money. You’ll need enough savings to provide an adequate income stream to cover your expenses throughout retirement.

For some people, saving for retirement is daunting because accumulating a retirement nest egg seems impossible. All too often, this leads people of all ages to delay saving. I’ll start saving when I have more money to save.

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Human resources consulting firm Aon Hewitt (www.aonhewitt.com) just released a study that delved into employee retirement benefits. The firm surveyed 210 mid-to-large U.S. companies representing 6.2 million workers.

The results revealed that just 38% of employers are confident that workers are taking accountability for their financial future, down from 43% in 2010. Further, only 30% of companies are confident employees are sufficiently prepared for retirement, showing no improvement from 2010.

In other words, companies believe employees are not in control of retirement planning, even though 401(k) plans and similar self-directed work retirement plans are designed to put employees in control. What this tells me is that employees – you, me and everyone we work with – need to take control of retirement planning because no one else is going to do it for us.

Perhaps that’s easier said than done. I think surveys are most useful when the findings are actionable, so here are … (more…)

Congress just passed The Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010, one of the most popular topics in the news recently. The most well-known part of the bill is the extension through 2012 of existing tax cuts that were set to expire at the end of 2010. Without passage of the bill, your tax rates would have risen in January by 3%-5%, depending on your tax bracket. There were also several add-ons that were not part of the original Bush-era legislation. To read a summary of the bill from the Senate’s Committee on Finance website click this link.

Perhaps the most significant part of the bill for anyone contributing to a work retirement plan is a reduction in the amount that employees owe in payroll tax. The bill temporarily reduces payroll taxes from 6.2% to 4.2% for 2011, which is roughly a 32% reduction. This presents a great opportunity to review the amount you are currently contributing to your work retirement plan. Consider increasing your (more…)

The IRS released 2011 retirement plan contribution limits last week, with expected results. Limits remained unchanged for 2011, compared with 2010, for employer-sponsored plan participants, including 401(k), 403(b), 457 and the Thrift Savings Plan. The annual limit is still $16,500, excluding adjustments, and $5,500 for eligible catch-up contributions.

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Fall is in full swing. Winter is on the way. Crisp sunny days and brightly colored trees … Halloween then Thanksgiving then the winter holiday season. Before you know, it will be 2011. What am I forgetting? I know there’s something else going on this time of year.

Oh yeah. It’s time to get the finances squared away! For those of you who are 50 or older, it’s time to make sure you’ve contributed every last cent that you’re legally allowed to your retirement plan(s).

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In 1989 R&B artist Calloway released the hit single I Wanna Be Rich. Just a few years later the Barenaked Ladies came out with If I Had a Million Dollars. For Travie McCoy, a million dollars apparently wasn’t enough and in 2010 he released the hit song Billionaire. By now I have you a little curious and confused about where I’m going with this.

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For most people, a work retirement plan will be the primary investment vehicle used to save for what we all hope will be a long, exciting and fun-filled retirement. With the uncertain future of Social Security, and the rapid decline of pension plans, individuals are more responsible than ever to fund their own retirement. As we approach 401(k) Day, we at Smart401k thought it would be a good time for a refresher on the importance of participating in your company-sponsored retirement plan and the benefits you receive.

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