Top 401k Retirement Planning Firms

Top 401k Retirement Planning Firms

The 401k retirement plan has obtained its name from the Internal Revenue Code of 1978. The complete functioning of the 401k is administered by the Employee Benefits Security Administration, which is under the purview of the Department of Labor.

A 401k plan is an employer sponsored retirement plan. However, employees have to contribute to the plan on a pre-tax basis. The maximum yearly contribution to the plan is limited by the federal government and the plan. In many cases, the employer also contributes corresponding funds to the account. On retirement, the money that the employee gets from the 401k depends on how the plan has grown over the years. This makes it absolutely essential for the employee to decide on the funds within the plan judiciously.
 
There are various positives of this plan. Firstly, this plan offers tax deferment. The money that is contributed towards retirement savings occurs before the tax is paid. In cases wherein the employer matches the employee’s contribution amount, both the amounts continue to mature tax-free until the money is withdrawn. Secondly, the employee has power over the direction of the contribution. The escalation of the funds is phenomenal during the 20 to 30 year period. Thirdly, the money from a 401k plan is transferable from one employer to another without any penalty being levied for early withdrawal and neither does one have to pay any federal or state taxes. Fourthly, the funds in a 401k plan are sheltered even if company declares bankruptcy. The creditors cannot utilize the money nor can the employer use the money to cover the losses and run the business. However, 401k also has some shortcomings. The age restriction for money withdrawal is 59 1/2. Moreover, there is a vesting period for the employer’s contribution, prior to the completion of which, one is not entitled to remove the entire money in the account.

A 401k plan can be moved to an IRA or any other qualified retirement savings plans. An IRA is an Individual Retirement Account. The rules of both the plans are similar in terms of flexibility. One of best companies in the US for 401k rollover is Fidelity. Many people are approaching this company to accomplish their retirement goals. While there are some who know exactly what they want out of a retired life; there are others who are clueless to the extent of not even being financial secured via a retirement plan. Fidelity is a well known company that has been around for many years, therefore there is no risk factor involved in investing one’s hard earned money. The company knows what it is doing owing to its experience. The company offers a vast range of mutual funds from conservative to aggressive. It formulates a plan with respect to each investor’s needs.  Even short term investments with the company are possible. However, if one has adequate funds, it is advisable to opt for a more aggressive mutual fund. Although these funds fluctuate highly, the growth potential is extremely high in the long run.

There are some other leading firms for 401k retirement planning such as Mitchell, McLeod, Pugh and Williams, Inc., which is an employee-owned investment advisory firm registered with the Securities and Exchange Commission under the Investment Adviser's Act of 1940. The principals of this firm have been part of the financial and investment management industry for over 100 years. Clients include profit sharing and 401-K plans, trusts and estates, IRA rollovers, charitable foundations and individuals.

There are many firms that can assist in planning towards retirement. The choice could be critical as your future depends on it!

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