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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

ask-fidelity-retirement-team

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.

(643 Questions : 642 Answers)

Q&A for Answers to Customer Retirement Questions Category

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Answers to Customer Retirement Questions

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Q: 
Must the "employEE" deferral portion be deposited by 12/31 of the tax year? I know that the employER portion is due by the (extended) due date of the return.
Age: 55 to 64
3 weeks ago
by
 - Cincinnati, OH, USA
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A: 
Thanks for inquiring about contribution deadlines for your Self-Employed 401(k), also known as a Solo 401(k).

Any salary deferrals must be contributed as soon as they can be reasonably separated from the other assets of the business.

Any employer contributions must be made by the employer’s tax filing deadline including any extensions, generally April 15.

If you have additional questions, please visit https://www.fidelity.com/retirement-ira/small-business/self-employed-401k/overview.

Thanks so much for this opportunity to help you!

Ken
1 week, 2 days ago
0
1
401(k) and 403(b)
 
1 answer

In service withdrawel

by
 - Falls Church, VA, USA
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Q: 
Is this offered by Fidelity whereby I can transfer part of my 401k to another investment option. If so is there a form I need to complete or how does the process work.

Thanks

Andrew
Age: 45 to 54
3 weeks, 2 days ago
by
 - Falls Church, VA, USA
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A: 
Thank you for the question, Andrew.

An in-service withdrawal from a workplace plan, like a 401(k), is one that occurs while you are still employed by the sponsor of the plan. If allowed by your plan, an in-service withdrawal can be a valuable tool in retirement planning. As you approach retirement, you may be looking for specific types of investments that may not be offered in your plan options. An in-service withdrawal would allow you to move money from the plan into another account that offers the features or choices you’re seeking.

Keep in mind that withdrawals of pre-tax contributions will be taxed as ordinary income and are subject to an early withdrawal penalty of 10%. If the in-service withdrawal is rolled into an IRA, however, generally the tax-deferred status is maintained.

Most plans have different rules when it comes to in-service withdrawals so please call your plan’s toll-free service center phone line to discuss your situation with a plan specialist. We also suggest consulting with a tax advisor prior to taking a withdrawal that may have tax implications.

Sarah
2 weeks, 1 day ago
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0
Q: 
I currently work as a RN and am going off to do missionary work for 1 year. What do I need to do to protect my money and/or invest it well?
Age: 25 to 34
3 weeks, 4 days ago
by
 - Houston, TX, USA
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A: 
Thank you for your question. When you separate from an employer, you generally have four options for your plan account balance:
1. Keep it in the plan.
2. Roll it over to an IRA.
3. Move it to a new employer’s plan.
4. Take a cash distribution.

For someone not actually leaving employment, but instead taking a leave of absence, the options may be a little different—the funds might have to stay in the account.

Even if you are separating from your current employer, leaving your money in the plan could be a good option for your situation. This will allow the money to remain invested and working to help you meet your retirement goals with the potential for tax-deferred growth. If you’re not going to have access to your account or won’t have the time to check on your account during your year of missionary work, you might consider selecting an investment option that doesn’t require much tracking, like a target retirement date fund. These funds invest in a diversified asset allocation that tends to be more aggressive when the target date is many years away, automatically becoming more conservative over time.

I suggest you call your plan’s toll-free service center phone line and discuss your situation with a representative who is familiar with your plan’s rules and investment choices.

Thanks, and good luck with your missionary work.

Sarah
2 weeks, 1 day ago
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Q: 
My wife and I both have 401k accounts that we contribute to. Can we both contribute $5500 to our IRA accounts and still claim it on our 2014 taxes? My wife is 55 and I'm 56 years old.
Age: 55 to 64
3 weeks, 6 days ago
by
 - Glendora, CA, USA
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A: 
Thanks for your question. Yes, you have up until the tax deadline of April 15th to make your 2014 IRA contributions, and because you and your wife are over 50, your maximum contribution limit for both 2014 and 2015 is $6,500. Although it’s not too late to take advantage of any tax deductibility you qualify for on this year’s return, remember that the tax deductibility of a Traditional IRA contribution is dependent on your income. If you have any questions about whether all or part of your contribution will be tax deductible, you can use our IRA contribution calculator found here: https://scs.fidelity.com/products/m....

You can also call a retirement representative at 800-544-6666 who would be happy to answer any of your questions.

Ken
3 weeks, 4 days ago
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Q: 
In over words my MRD is going to be about 2300.00 a year and I make 20,000.00 thru S.S. So do I have to pay taxes on the MRD since my income can be up to 24,000.00 without paying taxes. Also I understand that the first year, which will be this year for me since my birthday is 5/30/45, I have until April 1 of 2016 to withdraw that 2300.00? Can withdrawals be monthly or quarterly?
Age: 65 or over
1 month ago
by
 - Concord, CA, USA
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A: 
Hi Carol. Thanks for your question about minimum required distributions (MRDs). Your MRD is based on the value of your retirement accounts, and not on your income, so unless you have a Roth account or you have made after-tax contributions, you do need to pay taxes on your MRD. Generally, your MRD is subject to federal income tax and possibly state income taxes too. I suggest that you consult with your tax advisor about your situation.

You are correct about the deadline for taking your 2015 MRD. For the first MRD only, you can delay the withdrawal until April 1, 2016, but then you will need to take two MRDs in 2016 – one for 2015 and one for 2016. Your 2016 MRD deadline is December 31, 2016. There is another reason not to delay your first MRD until April 1 of the following year. The 2016 MRD would be calculated based on the year-end account balance from the previous year. This would include the 2015 amount in the account since you didn’t take it, which would make your 2016 MRD a higher amount.

As far as when the withdrawals can be made, you may take your MRD monthly, quarterly, or on whatever schedule you like, as long as the full amount is distributed by the deadline. If you would like to have your MRDs withdrawn automatically, you can enroll online at Fidelity.com/RDC or with a retirement representative by calling 800-544-4774. You can find more information about automatic withdrawals here: https://www.fidelity.com/cash-manag...

I hope this helps.

Ken
3 weeks, 4 days ago
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