Top 10 Ways to Prepare for Retirement - DOL - what to do with 401k at retirement

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• (1) How is 401k paid when you retire
• (2) Best way to withdraw 401k after retirement
• (3) 401k options after retirement
• (4) What happens to 401k when you retire

Top 10 Ways to Prepare for Retirement
Financial security in retirement doesn't just
happen. It takes planning and commitment
and, yes, money.
Facts retirement, Taking the Mystery Out of Retirement
Planning. (See back panel to order a copy.)
n Only half of Americans have calculated how much
they need to save for retirement. 3. Contribute to your employer's retirement
n In 2020, more than a quarter of private industry
savings plan
workers with access to a defined contribution plan
If your employer offers a retirement savings plan,
(such as a 401(k) plan) did not participate.
such as a 401(k) plan, sign up and contribute all you
can. Your taxes will be lower, your company may
n The average American spends roughly 20 years in kick in more, and automatic deductions make it easy.
retirement. Over time, compound interest and tax deferrals make
Putting money away for retirement is a habit we can
a big difference in the amount you will accumulate.
all live with.
Find out about your plan. For example, how much
would you need to contribute to get the full employer
Remember...Saving Matters! contribution and how long would you need to stay in
the plan to get that money.
1. Start saving, keep saving, and stick to
your goals THE ADVANTAGE OF STARTING EARLY
If you are already saving, whether for retirement or Start now! This chart shows what you would
another goal, keep going! You know that saving is a accumulate at 5, 15, 25 and 35 years if you
saved $6,000 each year and your money
rewarding habit. If you're not saving, it's time to get earned 7% annually.
started. Start small if you have to and try to increase
TOP 10 WAYS TO the amount you save each month. The sooner you start
saving, the more time your money has to grow (see the
chart below). Make saving for retirement a priority.
PREPARE FOR Devise a plan, stick to it, and set goals. Remember, it's
never too early or too late to start saving.
RETIREMENT 2. Know your retirement needs
Retirement is expensive. Experts estimate that you
will need 70 to 90 percent of your preretirement
income to maintain your standard of living when you
stop working. Take charge of your financial future.
The key to a secure retirement is to plan ahead. Start
by requesting Savings Fitness: A Guide to Your
Money and Your Financial Future and, for those near
4. Learn about your employer's pension plan 8. Put money into an Individual Retirement For More Information:
If your employer has a traditional pension plan, Account
check to see if you are covered by the plan and You can put up to $6,000 a year into an Individual Visit the Employee Benefits Security
understand how it works. Ask for an individual Retirement Account (IRA); you can contribute even Administration's website to view the following
benefit statement to see what your benefit is more if you are 50 or older. You can also start with publications:
worth. Before you change jobs, find out what much less. IRAs also provide tax advantages. ? Savings Fitness: A Guide to Your Money and Your
will happen to your pension benefit. Learn what When you open an IRA, you have two options - a Financial Future
benefits you may have from a previous employer. traditional IRA or a Roth IRA. The tax treatment ? Taking the Mystery Out Of Retirement Planning
Find out if you will be entitled to benefits from of your contributions and withdrawals will depend ? What You Should Know About Your Retirement
your spouse's plan. For more information, on which option you select. Also, the after-tax value Plan
request What You Should Know about Your of your withdrawal will depend on inflation and the ? Filing a Claim for Your Retirement Benefits
Retirement Plan. (See back panel for more type of IRA you choose. IRAs can provide an easy
information.) way to save. You can set it up so that an amount is ? Women and Retirement Savings
5. Consider basic investment principles automatically deducted from your checking or savings ? Retirement Toolkit
How you save can be as important as how much account and deposited in the IRA. ? Choosing a Retirement Solution for Your Small
you save. Inflation and the type of investments 9. Find out about your Social Security Business
you make play important roles in how much benefits
you'll have saved at retirement. Know how On average, Social Security retirement benefits To order copies, contact EBSA electronically or by
your savings or pension plan is invested. Learn replace 40 percent of pre-retirement income for calling toll free 1-866-444-3272.
about your plan's investment options and ask retirement beneficiaries. You may be able to estimate
questions. Put your savings in different types of your benefit by using the retirement estimator on The following websites can also be helpful:
investments. By diversifying this way, you are the Social Security Administration's website.
more likely to reduce risk and improve return. For more information, visit their website or call AARP
Your investment mix may change over time 1-800-772-1213. American Savings Education Council
depending on a number of factors such as your
age, goals, and financial circumstances. Financial 10. Ask Questions Certified Financial Planner Board of Standards
security and knowledge go hand in hand. While these tips are meant to point you in the right
direction, you'll need more information. Read our Consumer Federation of America
6. Don't touch your retirement savings publications listed on the back panel. Talk to your The Actuarial Foundation
If you withdraw your retirement savings now, employer, your bank, your union, or a financial U.S. Department of the Treasury
you'll lose principal and interest and you may lose adviser. Ask questions and make sure you understand
tax benefits or have to pay withdrawal penalties. the answers. Get practical advice and act now. U.S. Securities and Exchange Commission
If you change jobs, leave your savings invested in
your current retirement plan, or roll them over to
an IRA or your new employer's plan.
7. Ask your employer to start a plan
If your employer doesn't offer a retirement plan,
suggest that it start one. There are a number of
saving plan options available. Your employer
may be able to set up a simplified plan that can
help both you and your employer. EMPLOYEE BENEFITS SECURITY ADMINISTRATION
UNITED STATES DEPARTMENT OF LABOR
For more information, request a copy of
Choosing a Retirement Solution for Your Small
Business. (See back panel for more information.) September 2021


How to withdraw money from a 401k After retirement? Key Takeaways How your 401 (k) works after retirement depends in large part on your age. If you retire after 59½, you can start taking withdrawals without paying an early withdrawal penalty. ... If you don't need to access your savings just yet, you can let it sit—though you won't be able to contribute. More items...

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