401k Financial advisor in North & South Carolina
Employees and Individuals of 401(k) plans need financial guidance for many reasons. An 401(k) financial advisor offers advice and guidance to employees and individual investors that can help them prepare for retirement and potentially make better money decisions.
TruNorth Advisors is committed to helping you achieve your retirement goal and become successful in your investment journey.
What is a 401k
According to the IRS, a 401(k) is a retirement savings plan that allows employees to contribute a part of their wages to a retirement account until a certain age.
What is a 401(k)
In a 401(k) plan, the contribution of the employee is invested in mutual funds tax-deductible until the employee is ready to withdraw the money. The two types of 401(k) retirement plans are traditional 401(k) and ROTH 401(k). Employees can choose one of these two or both for their 401(k) plan.
Do I Need a 401k
You need a 401(k) if you are an income earner with financial and retirement goals. A 401(k) retirement plan is important for every employee who wishes to save and invest for their future.
When you save in a 401(k), you are not only keeping your money for later, but you are also investing, which can potentially generate high returns in the future.
Is a 401k a Retirement Plan?
Yes! A 401k is a retirement plan. A retirement plan allows individuals to save money towards retirement, whether through their employer or as an individual account. In this case, the 401(k) is a workplace or employer-sponsored retirement account because it can be accessed through an employer.
How Does a 401k Work When You Retire?
Just like most retirement plans, after you retire and reach the age of 59½, you can start withdrawing your contributions from a 401(k).However, if you withdraw before the age of 59½, you will have to pay a 10% withdrawal penalty. It is also important to know that you don’t have to start receiving your distributions right away. Because a 401(k) is also an investment account, it means your money can keep growing as long as it remains in the account.
You can keep the money in you 401(k) account and allow it to grow until you reach the age of RMD (required minimum distribution), which is age 72.
There are other steps to take to make the most of your retirement contribution and withdrawals, especially if you would like to roll over your retirement account. It is advisable to seek the guidance of a 401(k) financial advisor to guide you through the process so you can access potential tax benefits and other investment opportunities.
How Much Do I Need in my 401k to Retire?
By the time you retire, you should have saved 10 to 12 times your annual salary in your 401(k) account. This typically applies to those age 67 or older. From age 30-60, you should have saved at least 3 to 8 times your annual salary by retirement.
Some people might be unable to save as much before retirement, and some might be able to save more. The most important part is to save within your income means and also within the maximum contribution allowed for an employee. If you have the opportunity to get matched with your employer, you can save according to your employer’s maximum contribution.
Do I Need a Financial Advisor For My 401k
It is important to note that a 401(k) is a part of an income plan for retirement and should not be your only source of income. There are other financial opportunities to utilize to achieve retirement goals. A 401(k) financial advisor understands this and serves as a guide for you while you navigate retirement planning.
Here are reasons you should use a 401(k) financial advisor:
Explore tax benefit opportunities: A 401(k) financial advisor helps you explore your tax benefit option and gives you advice on how to potentially maximize it. A financial advisor can also help you decide what type of 401(k) to choose and which of them can potentially benefit your financial situation in the long run. There are also decisions to be made on the number of contributions to be made annually and when you should start withdrawing from your account.
Investment advice and guidance: A 401(k) plan usually has limited investment opportunities and is mostly restricted to mutual funds. But with a financial advisor, you can be guided on how to choose a self-directed option which can open you up to more investment opportunities. Your 401(k) financial advisor may also suggest investments that will best suit your financial situation and retirement goals.
Financial guidance: As mentioned earlier, a financial advisor will not only give you 401(k) related advice, but they can also help you make general financial decisions and give you advice on other investment options to select from for a better financial future.
401k Financial Advisor for Employers in North & South Carolina
As an employer in North and South Carolina, your fiduciary role in 401(k) retirement planning is important and crucial.
Especially if you don’t have plan administrators to help you manage the affairs of the 401(k) for your employees, it is advisable to hire a 401(k) financial advisor.
A 401(k) financial advisor can help you in managing 401(k) roles and responsibilities and help you maximize the benefits of the retirement plan for your employees and organization.
401k Financial Advisor for Individuals in North & South Carolina
One of our goals at TruNorth is to help individual investors maximize their 401(k) retirement plans. A financial advisor can guide you to make decisions that align with your financial goals and future. We put into consideration your present financial state, your retirement goals, your financial plans, and your annual income to help you on your path to retirement.
To learn more about these processes, reach out to us today!