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8. If your plan can be rolled over to another qualified plan if you terminate employment;
9. What the penalties are for early withdrawal.
With such large tax-savings possibilities and so many plans to choose from, there’s sure to be something that works for you. Talk to a finan- cial advisor today and get your savings plan started. The sooner you begin, the sooner your money will start working for you.
What if I Need the Money before I Retire?
The purpose of depositing money in a 401(k) is so it can accumulate wealth for you to enjoy when you retire. Sometimes, however, the unexpected happens and there is an immediate need for cash. When this happens, you may look to your 401(k) as a source for the needed funds. Before you consider taking funds from your 401(k), here are a few things you need to know:
1. While the government allows plans to offer 401(k) loans, the plans are not required to do so. Therefore, the first thing you will need to do is see if a loan is even available through your 401(k) plan.
2. If your plan does allow loans, there will be restrictions. These restric- tions may or may not include:
• A minimum loan amount; most plans do not allow you to borrow less than $1,000
• A minimum number of loans you can take at one time; plans often do not allow you to take a second loan until the first loan is paid off
• A restriction on the amount you can borrow; most plans do not allow you to borrow more than 50% of your vested balance, e.g., your 401(k) may show a balance of $10,000 but if you are only 20% vested, only $2,000 is your vested balance and only 50%, i.e., $1,000, of this is available for you to borrow
Where Should I Save My Money?