Here's some of the scoop on the new retirement plan changes just signed into law. In particular, note the following:1. Encouraging automaric enrollment in 401(k)s.2. Direct rollover from 401(k)s into Roth IRAs. You still have to cough up for the taxes, so this may not be all that great a feature.3. Making the increased IRA contribution limits permanent.Here's a link to the articlehttp://articles.moneycentral.msn.com/RetirementandWills/PlayingCatchUp/BigChangesForYour401kRetirement.aspx?GT1=8473foolazis(cross posted to Foolish 401(k) board)
2. Direct rollover from 401(k)s into Roth IRAs. You still have to cough up for the taxes, so this may not be all that great a feature.This will most likely be more worthwhile to younger folks who are not yet in high marginal tax brackets. If they leave a job, they can roll the (relatively) small 401(k) monies into a Roth. For an old geyser like me, with a (relatively) large amount in the 401(k) it makes no sense at all due to the tax treatment.These changes (making it easier to save) tell me that the gov is really trying to impress upon younger folks the idea that saving for retirement is their responsibility. (IOW, they know SS is falling apart and hope that everyone else understands that's what's written between the lines.)2old
For an old geyser like me,Old Faithful is an old geyser...perhaps you meant geezer 8-)I don't usually comment on spelling, but loved this one. I would be an old geyser, since I blow my top on a regular basis. I got you meaning though. If you have a large chunk in your 401(k), then you probably really don't want to do a direct rollover - the taxes would kill you. foolazis
I read HR 4 but could not find the specifics but...I thought I heard that they also eased the restrictions on employers offering advice on how to allocate the funds in a 401k. That is something that has been need for quite some time as most people with a 401K receive no advice and have little to no knowledge on how to effectively invest.
I would be an old geyser, since I blow my top on a regular basis.I also blow my top regularly--I guess that makes me an old geyser geezer ;-)2old(apparently watching NGC and DC too much)
(apparently watching NGC and DC too much)You too? These and the History Channel are the best channels on TV.foolazis
...I thought I heard that they also eased the restrictions on employers offering advice on how to allocate the funds in a 401k.That's in there too. It appears that the advisors selected can't be compensated based on the investments chosen - so it looks like the employers can engage fee-only advisors to provide the advice.foolazis
Not as good of a change as I had hoped then. I would hope that the company could provide the advice at no cost to the employee. Some simple risk tolerance models as well as what to look for in a fund would be better than paying a few hundred dollars to some advisor when all the employee is likely doing is putting away 3-5% a month.
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