Please Explain: 401(k)s, 403(b)s, and Saving for Retirement

Friday, June 08, 2012

Tax-advantaged accounts like the 401(k), 403(b), and 457 plans are popular ways to invest money for retirement, but unlike traditional pension plans, these plans require people to manage their investment strategies yourselves. Eleanor Laise, Editor, Kiplinger's Retirement Report, and Anthony Webb, research economist at the Center for Retirement Research at Boston College, discuss how these plans work, how best to manage them, and how to plan—and save—for retirement.


Eleanor Laise and Anthony Webb

Comments [15]

401k pension plan from USA

Really quality information, thank you so much.

Jun. 11 2012 07:52 AM
Sophie from Poughkeepsie, NY

Thank you for answering my question.

Jun. 08 2012 01:58 PM

too young to collect social security, longtern unemployed (3 years now), i have nearky exhausted my 401-k or ira, with horrific tax consequences. i believe the longterm unemployed should be given some sort of tax breakand believe such a proposal was entertained briefly by the administration. do your guests know anything labout that?

Jun. 08 2012 01:52 PM

Is there a way to use the money in our 403B to buy a winter home and not have to pay taxes?

What is the best way to use that money?

Jun. 08 2012 01:49 PM
Dana Sloan

I work for a large corporation which provides both a pension and 401K. I know very little about financial matters—how necessary do you think it is for me to enlist the help of an independent financial advisor as i approach retirement? I have about 7 years before I retire.

Jun. 08 2012 01:48 PM
jgarbuz from Queens

All these "plans" were just ways to suck the suckers' monies into the great Casino called Wall STreet. As usual, the suckers are left holding an empty bag.

Jun. 08 2012 01:46 PM
JoanL from Brooklyn

Re: availability of Roth to high income individuals. I believe someone who earns too much to contribute to a ROTH IRA in any given year can make a non-deductible contribution to a traditional IRA and then convert the funds/portion of the funds to a ROTH. Tax would be owed on the gains, but if the person's traditional IRAs don't have a lot of gains at the tome of the conversion, it would likely be a good idea, I think. Note I am not a financial professional.

Jun. 08 2012 01:46 PM
kp from nj

Leonard...I can't believe you just said that. If a non-working spouse (e.g. wife) and a working spouse (e.g. husband) get a divorce, why wouldn't she be entitled to half????? presumably they made the decision together for her to stay home...if they split each one is entitled to a portion of the assets, not just the spouse who 'earned' them....

Jun. 08 2012 01:44 PM
Sophie from Poughkeepsie, NY

Not sure question posted the first time: what about using 401k for a down payment for a house?

Jun. 08 2012 01:43 PM
pina from South Plainfield

Please ask how SEP IRA is different from regular IRA. As far I know it's for freelancers and you can contribute more money to it. When you asked your guests about IRA options for freelancers they didn't mention SEP IRA as an option....

Jun. 08 2012 01:43 PM
Tim from NYC

How do I figure out how much I should save per month? Is there a formula I can use?

Jun. 08 2012 01:42 PM
Sophie from Poughkeepsie, NY

What about using 401k for down payment for a house? Any downsides?

Jun. 08 2012 01:41 PM
g in staten island from staten island

As fewer people have defined benefit plans, fewer retired people will be able to spend any money on anything except the most essential things--if they can aford that. So businesses that want patrons, need to support the idea of pensions. We are having a race to the bottom with lower wages ad fewer pensions. The younger generation is not earning enough to save for retirement. Actually, most workers could not save enough (in 401k, 403B, 457, or IRA Roth or traditional) to save for retirement that lasts 20-30 years, even with social security to supplement-- and that is all social security is capable of doing. So older workers are working longer, reducing the job pool for the younger folks.

Jun. 08 2012 01:37 PM

Please discuss the differences & advantages of 401K/Roth and IRA/Roth

Jun. 08 2012 01:35 PM
Susan from Montclair

What is the best way to go about finding a financial advisor? I've bee told not to work with someone who earns money on the funds/tools he/she recommends.

Jun. 08 2012 01:26 PM

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