Most Frequently Asked 401(k) Questions
If you have recently opened a 401(k), you probably have a lot of questions about it. After all, your new retirement account will have a significant effect on your life, so it’s only natural to want to know as much about it as possible. Fortunately, it is usually quite easy to get your questions answered! Here are the answers to some of the most commonly asked questions about 401(k) accounts.
Can I roll over my 401(k)?
Most people do not expect to have the same job for their entire lifetime. If you switch jobs, you may be wondering whether you can transfer your retirement account. Fortunately, the answer is yes! You can usually roll over your 401(k) account into an IRA. If your account contains less than a certain amount of money, however, your employer may simply opt to write you a check for that money.
Can I borrow money from my 401(k)?
If you are in need of money quickly, you do have the option of taking out a loan from your 401(k) account. However, the loan must be paid back in full within a five-year timeframe. It’s generally recommended that you take out a loan on your 401(k) only as a last resort.
What is the difference between a traditional 401(k) and a Roth 401(k)?
With a traditional 401(k), your contributions go in before they are taxed. Any withdrawals you make from your account later on will then be taxed. A Roth 401(k) is a type of plan in which your contributions are taxed first, but any withdrawals you make later are not taxed. If you are having trouble deciding which type of plan is best for you, talk to a financial advisor.
THPK Certified Public Accountants has been serving the community of Steamboat Springs, CO, since 1972. Their experienced staff is dedicated to providing each and every customer with the excellent services they deserve. Whether you need help preparing your taxes or planning for retirement, call them at (970) 879-1787 for assistance.
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