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Tips on Keeping your 401(k) Current

401(k)s can be very beneficial when it comes to planning your retirement. Most employers offer 401(k)s and if you are self-employed you can get yourself a Solo 401(k). These plans are there to help you as you near retirement. That is why it is so important to make sure they are current and giving you the most benefits. Consulting with the Robinson, Seiler, Anderson & Fife, LC. in Provo can help you in making sure you are getting the most out of your 401(k). Below are some tips to make sure your retirement plan is current and compliant.

 

Keep it Current

It is vital to keep your plan current and compliant. The IRS requires all 401(k) plans to be reviewed and amended at least once every 6 years. If your plan is not up-to-date and you happen to have an audit you will be subject to fines and possible plan termination. It is always a good idea to review and amend your plan every two to three years to make sure it is compliant with all current laws.

 

Keep Track of your Plan Funds

If you are one of many that have a 401(k) you need to make sure you are keeping track of your funds.

You want to make sure you know where each contribution is coming from. Keep track of how much you put into the plan and how much your employer/company is putting in as well. Have a written accounting record documenting all these different fund contributions so you can be aware of any miscalculations.

 

Report Contributions and Rollovers

With a 401(k) you may have had the option to roll over funds from an IRA or another 401(k). You need to make sure that you indicate all rollovers and contributions into your current 401(k). When rolling over funds you will receive at 1099-R form that will indicate that the funds were transferred to your current retirement account and won’t be subject to being taxed. Any other contributions you make will be taxed properly, making your account correct and current when it comes to the IRS.

 

401(k)s are there to help you, not hurt you. As long as you are following the laws set in place and keeping track of the activity of your retirement fun you should come out with the retirement funds you have been working hard towards. For more information on 401(k)s and the legalities involved, feel free to schedule a consultation with our lawyers at Robinson, Seiler, Anderson & Fife, LC. in Provo today.