Are catch-up contributions allowed for SEP IRAs?

July 7, 2024 No Comments

A: In general, catch-up contributions are not allowed for SEP IRAs because these plans require contributions to be made by employers only. Since catch-up contributions are made by the account-owning employee, they are not permitted. However, some SEP plans may allow employees to make traditional

Who bears the investment risk in 401(k) plans?

June 30, 2024 No Comments

A: Who actually bears the investment risk in a pension plan depends on the type of pension plan that is employed. In a broad sense, there are two benefit formulas that will calculate the pension benefits the plan member will receive. In the case of

Who is eligible for Canada Pension Plan benefits?

June 30, 2024 No Comments

A: Nearly all individuals who work inside of Canada are eligible to contribute toward and receive benefits from the Canada Pension Plan, or CPP. The CPP is a deferred income retirement vehicle that has been in place since 1965 when it was introduced as a

Why are insurance companies and pension funds considered financial instruments?

June 30, 2024 No Comments

A: Insurance policies are widely considered to be financial instruments. Pension funds may contain many different types of financial instruments, although they are not always classified as such. Most tax regimes, including those in the United States, offer special treatment for the value of insurance

Why are IRA, Roth IRAs and 401(k) contributions limited?

June 30, 2024 No Comments

A: Contributions to IRA, Roth IRA, 401(k) and other retirement savings plans are limited by the IRS to prevent the very wealthy from benefiting more than the average worker. Contributions to traditional IRA and 401(k) accounts are made with pretax dollars, so they can offer

Why did my employer delay 401(k) distributions?

June 30, 2024 No Comments

A: Your employer or the plan administrator for the 401(k) plan should have provided you with a copy of the 401(k)’s summary plan description (SPD). If you can’t find your copy, contact your employer and ask for a replacement. A copy of the plan’s SPD

Why is my 401(k) not FDIC-Insured?

June 30, 2024 No Comments

A: 401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit Insurance Corporation (FDIC) covers deposits, not investments. Investments are riskier and carry the potential for loss of principal. Most 401(k) accounts are composed of investments. However,

Why is Social Security running out of money?

June 30, 2024 No Comments

A: On August 14, 1935, U.S. President Roosevelt signed into law the Social Security Act.Originally implemented to assist older Americans by paying them a continuing income upon their retirement, the program was later amended to extend benefits to the spouse and minor children of retired workers,

Why were 401(k) plans created?

June 30, 2024 No Comments

A: As the most widely used and well-known retirement savings plans in the United States, 401(k) plans were the brainchild of benefits consultant Ted Benna. In 1980, Benna noticed that the rules established in the Revenue Act of 1978 made it possible for employers to

What will happen to my SEP IRA if I leave my current employer?

June 30, 2024 No Comments

A: Because the funding vehicle for the SEP is a Traditional IRA, the same transfer and rollover rules that apply to a Traditional IRA also applies to an SEP IRA. The SEP is treated as a Traditional IRA, except that it is allowed to accept

All Rights Reserved