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Ask Fidelity

We know saving for retirement is a top priority for many investors. No matter where you are in the planning process, you may have questions. We can help. Check out the questions we've already answered, or if you're a Fidelity customer, submit your own. We'll post replies to selected questions on a weekly basis.

Ken and Sarah answer your questions

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For more than 60 years, through all kinds of market conditions, Fidelity has been helping people like you pursue their financial goals. Ken Hevert and Sarah Walsh, who lead our Ask Fidelity team, have spent decades helping investors understand retirement strategies. They can help put Fidelity’s expertise to work for you.

Learn more about Ken and Sarah.

(580 Questions : 579 Answers)

Q&A for Answers to Customer Retirement Questions Category

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Answers to Customer Retirement Questions
 
0 answers

where do I find the RMD on my IRA?

by
 - Highlands Ranch, CO, USA
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Age: 65 or over
3 days ago
by
 - Highlands Ranch, CO, USA
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Q: 
I still work and have a income over 200,000 and we are married and file jointly. He is not working, gets ss, .But would like to withdrawal $50,00 what are taxes we would have to pay, can it be used to buy a second home??
Age: 55 to 64
2 weeks, 3 days ago
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A: 
Thanks for your questions, Theresa. Since your husband is over 59½ and is no longer working for the employer who sponsored his 401(k) plan, he is free to withdraw the money from the plan for whatever purpose he chooses. Although he is past the age that would trigger an early withdrawal penalty, keep in mind that he is still responsible for income tax on the amount of pre-tax contributions withdrawn from the plan. When withdrawing from a workplace retirement plan, the plan will generally withhold 20% for taxes. You may be able to have more withheld, but the minimum is 20%.

When considering a large withdrawal from a 401(k), remember that the amount withdrawn will be added to your income for the calendar year and, depending on your current tax situation, could move you into a higher tax bracket, triggering a larger tax bill than you may have anticipated.

We always suggest that you consult with a tax advisor prior to initiating a withdrawal to make sure you’re aware of what the tax impact will be.

Sarah
1 week ago
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Age: 55 to 64
2 weeks, 6 days ago
by
 - Illinois, USA
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A: 
Thanks for the great question. Your Social Security benefit is based on your work record and depends on how much you’ve earned over the span of your working life. Income from 401(k) withdrawals does not count as earned income and will not impact your Social Security benefit.

What will have the greatest impact on your Social Security benefit is the age at which you start to receive your payment. The earlier you start to receive your benefit, the lower the monthly payments will be. It’s important to take this into consideration when deciding when to start taking Social Security. For more information, read this Fidelity Viewpoints® article “Should you take Social Security at 62?”: https://www.fidelity.com/viewpoints.... For more help, please call your plan’s toll-free service center phone line and speak with a representative who can provide guidance based on your needs and objectives. If you’re considering a withdrawal from your plan, consult with a tax advisor to make sure you are aware of the tax implications.

Thanks and good luck.

Sarah
1 week ago
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0
401(k) and 403(b)
 
1 answer

Lump sum after tax 403(b) contribution

by
 - Trumbull, CT, USA
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Q: 
I am over 70-1/2, taking MRDs, but still working and contributing to a pre-tax 403(b).
Can I make an after-tax lump sum cash contribution to the 403(b) to make up the maximum annual contribution (including 15 year, and catch up amounts), or can I only contribute through salary withholding?
Age: 65 or over
3 weeks, 1 day ago
by
 - Trumbull, CT, USA
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A: 
Thanks for the question. Unfortunately, there are only two ways to add money to a 403(b): through payroll contributions and through a rollover from a previous 403(b) plan account. You cannot meet your maximum annual limit through a lump sum contribution.

The first thing I’d like to ask you is whether you’re taking minimum required distributions (MRDs) from the 403(b) with your current employer? If you are still working for that employer you do not need to start taking MRDs from that account until April 1 of the calendar year after the year in which you retire. If you have a 403(b) with a previous employer, you would need to start taking MRDs from that account the year you turn 70½ even if you are still working for another employer.

If you are looking for a way to save more money for retirement with after-tax dollars, you may want to consider an IRA. An IRA may offer a wider variety of investment options and depending on your situation you may be able to take advantage of a Roth IRA with its tax-free withdrawals (for qualified withdrawals only).

Fidelity offers several options for after-tax retirement savings. Go here to learn more about IRAs: https://www.fidelity.com/retirement.... Besides an IRA, a deferred annuity can provide tax-deferred growth in retirement. You can learn more about annuities here: https://www.fidelity.com/annuities/....

With the number of options available to you, it might be helpful to speak with a Fidelity retirement representative by calling 800-345-1388. The representative can work with you to build a plan that makes sense for your specific needs and goals, including developing a retirement income plan to make sure your assets are invested properly and that you’re income needs will be met as long as needed.

Good luck.

Sarah
1 week ago
0
0
Q: 
I resigned from a prior job to become a full-time student about 5 years ago. I now work for a different company and would like to rollover the 401(k) from my prior job. I have been in my current job for almost 2 years. Do I face tax or other penalties for rolling over this "late in the game"? Thanks for your help.
Age: 25 to 34
3 weeks, 6 days ago
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A: 
Thanks for your question. No, there are no taxes or penalties for rolling over an old 401(k) into a new workplace savings plan, if your new employer allows this. Not all do, so you would need to check with your current employer. There are other distribution options once you leave an employer. Generally, you have four primary distribution choices, whether you take action immediately or years later:

1. The first one I mentioned above – Roll the money over to a new 401(k) plan. There would be no taxes or penalties, but as I said, not all plans will allow this so check with your new employer.

2. Keep the money in the plan – Most plans will allow you to maintain your 401(k) account as long as your balance is above the plan’s minimum threshold. No taxes or penalties would apply.

3. Roll it over to an IRA – A rollover to an IRA will keep your retirement money working for you in a tax-deferred account and can provide a wide variety of investment options. No taxes or penalties would apply.

4. Take a cash distribution – This option should be a last resort, since cashing out will incur income taxes on the distributed amount and will trigger an early withdrawal penalty if you’re under age 59½. In addition to the immediate financial impact, cashing out could significantly harm your ability to retire when you want to by reducing the amount of money you have growing in a retirement account.

Fidelity offers a variety of tools and resources to help you make a distribution decision. Go to https://www.fidelity.com/retirement... and watch the video about what to do with an old 401(k).

Thanks, and good luck.

Sarah
1 week, 6 days ago
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