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This Sounds Like a Dumb Idea: Cutting the 401(K) Deduction

Wednesday, May 2nd, 2012

Okay, I know the NY Post is usually alarmist but I have heard about this idea before. The idea supposedly being kicked around is to limit the amount employees and employers can put towards the employee’s 401(k) to a maximum of $20,000 or 20% of income, whichever is smaller. The current amount is a maximum […]

Do You Know What Your 401(k)’s Personal Rate of Return is for 2011?

Monday, October 3rd, 2011

I just logged on to my wife’s 401(k) account. The balance is roughly $60,000 less than it was at the peak early this year (and this includes several thousand dollars of contributions). OUCH. Fidelity calculates a personal rate of return, which is the return adjusted for the timing of contributions. Our personal rate of return […]

Getting a Raise? Up Your 401(k) Contribution a Percentage Point

Tuesday, April 26th, 2011

Let’s say you make $75,000 per year and you are saving 10% in your 401(k). Now let’s say you get a 5% raise, which puts your new annual income at $78,750. Now, before you go make a budget based on your new income, I want you consider increasing your 401(k) contribution percentage by 1% to […]

An Idea I Don’t Like: Variable Annuities Inside a 401(k)

Wednesday, March 9th, 2011

Yesterday’s Wall Street Journal had a special retirement planning section. One of the articles was about using annuities during retirement to boost income and decrease volatility. One of the stable annuities for doing that is a fixed immediate annuity. I don’t have a problem with fixed immediate annuities because they are usually inexpensive, easy to […]

Your Goal This Year: Save $8.25 Per Hour

Friday, January 14th, 2011

$8.25 per hour… That’s the number I get when I divide $16,500 (the 2011 maximum allowable employee 401(K) contribution) by 2000 hours (40-hour work week, 50 weeks per year). It seems like a lot. Granted, it does not include the tax savings on contribution. The actual dollar amount would be lower after taxes. Still, the […]

Question of the Day: 401(K) Contributions

Tuesday, January 11th, 2011

As I was going over our finances at the end of 2010, I decided to increase our contributions to my wife’s 401(K) by two percentage points. We are now at 10%. We had done the maximum for a couple of years when she first started working but had to back off quite a bit after […]

Annuities in a 401(k) – I Can’t Tell You How Much I Hate This Idea

Wednesday, September 22nd, 2010

Cruising the ‘net this AM, I came across this article on Yahoo!: Annuities May Be Coming to 401(k)s. It wasn’t too long ago that I read that most 401(k) plans were too complex and offered too many choices for employees, which made the decision-making process too difficult. So now they want to add annuities to […]

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