Qualified Plan Facts
The Truth about Your 401k

Fundamental facts that you should know about your Qualified Plan, 401k. Learn the truth about your 401k and how it really works.

If you are pondering the thought of contributing more than your match to your 401k, or whether or not to make a "tax-deductible" contribution to your IRA, THINK AGAIN!

Before you put another dime into your 401k, 403b, TSP, SEP or other IRA you need to know what the government and your employer aren't telling you. And, the truth may scare you!

Take a look at the history of the marginal tax rate in the U.S.

Do you think taxes are going up or down in the future?

In the United States there are a range of options for retirement plans, one of the most popular is the 401k Qualified Plan. It's a qualified plan because of the Employee Retirement Income Security Act (ERISA) which regulates qualified retirement plans. The Internal Revenue Service (IRS) typically names qualified plans, ie 401k, after a section of the Internal Revenue Code.

Qualified retirement plans are regulated by The Employment Benefits Security Administration, part of the U.S Department of Labor. The 401k plan allows the employee to make contributions from their salary and is sometimes matched by their employer.

The advantage of the 401k plan is that the employee can make pre-tax contributions to the plan. As long as the funds are left intact the funds remain non-taxable until a withdrawal is made. This however is also the disadvantage.

What you need to understand is that Qualified Plans do 2 things:
1. They defer taxes.
2. They defer the tax calculation.

Qualified plans DO NOT necessarily save taxes. You may be able to get a tax deduction this year or contribute funds pre-tax, however you will pay the taxes.

Questions you may want to ask yourself:
 1. Would you like to make more money or less money in the future?
 2. What tax bracket will you be in at retirement?
 3. When will you need your funds and how will you access them?
 4. What deductions will you have when you take your money?

The problem is the IRS controls your Qualified Plan and they are constantly changing the tax laws which affect contribution levels, required minimum distributions (RMD) and taxes.

You can create a retirement plan that is free of government regulation and experience benefits far beyond any of those "promised" by the IRS.

Call Barry Page at 228-875-5545 or Toll-Free 888-845-3422
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DISCLAIMER
The terms retirement planning and financial planning are used in a generic form here because of their relative significance to financial success through planning. We provide information to our clients and those who visit our website in search of financial information and general knowledge.

We do not provide tax or legal advice and accept no liability for the information we provide. We are not responsible for information from outside sources and the links we provide to other sources.

Our goal is to provide maximum protection for our clients through proper coordination of insurance and financial planning, while helping them attain their financial goals with efficient resource management and macro planning.

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