Many Employers Modifying or Eliminating 401k Matching

A recent study from accounting and tax advisory firm Grant Thornton indicates that many employers are pulling back on 401k plans in light of the difficult economic climate. Grant Thornton surveyed 283 companies. Findings include: 29 percent have modified or intend to modify their 401k employer matching contribution. 20 percent of all respondents plan to eliminate the employer match entirely. Larger employers are more inclined to make changes to their 401k plans. Companies in the health care and...
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HSBC Retirement Report Discusses "Perfect Storm"

HSBC released its fifth annual "Future of Retirement" study. The study is the largest of its kind, covering over 15,000 people in 15 countries. The report suggests a perfect storm of demographic, individual and financial factors that have the potential to derail the retirement plans of millions of people around the world: Stephen Green, Group chairman of HSBC, said: "A perfect storm is confronting pensions planning, created by an ageing population, falling pension funds values, a drop in state...

Almost Half of All People Leaving a Company Take Cash from a 401k

A 2005 survey from the benefits consulting company Hewitt Associates indicates that almost 50% of all people who are leaving an employer take a cash distribution from the existing 401k plan. A cash distribution is very different from a IRA rollover . A rollover does not involve penalties or taxes--simply moving money from a 401k to an individual retirement account or IRA. On the other hand, a cash distribution involves both taxes and early withdrawal penalties. This is an amazing and disturbing...

Prudential EVP Comments on "Deeply Flawed" Retirement System

Bernard Winograd is an executive vice president at the Prudential Insurance Company . Speaking at a recent industry conference, Winograd expressed his views on the existing methods of explaining retirement issues and solutions in the United States: "The retail system in this country of explaining this (retirement) to people is deeply flawed. There are way too many people in the system without adequate training, and there are way too many people with the wrong motives." The "retail" system...

Many Rules and Pitfalls with Early Withdrawals from 401k and IRA

The financial crisis has taken a heavy toll on the personal finances of most people. A natural reaction is to consider withdrawing funds from a tax advantaged saving plan such as a 401k or IRA. The reality, though, is that funds from such sources can be extraordinarily expensive when all of the penalty fees and tax implications are taken into account. The rules are complex and generally depend on a person's age and the type of plan involved. Some high-level points to consider: The federal...