I am putting 10% of my gross income into a 403B. I was told to do it, so I did. When do I get it back?

Question

I make about $25 an hr. I am fully vested at my job and my employer matches me up to so much of a percentage. The Lincoln financial group gave me 3 options, high, low and medium risk investments. I figure I am 42 years old and have about 20 yrs before I retire, so I signed up for the high risk option. Is Lincoln Financial reputable? Should I keep putting money into this thing? What happens when I am 65 and want it back? What happens if I poop out and and decide I want to retire at 55?

PS: I am not retarded, I am a college graduate and work in a totally different field. I am pretty much a financial idiot. I bet you would be surprised.

Answer 1

If and when you leave the company, you will cash out this investment account. Until then, it's to your advantage to invest every penny that your employer matches.

After that amount, it's up to you.

As for the profile of the investment fund, that is public information that you may obtain. If you have questions about it, I'd encourage you to seek help or ask a question right here, once again.

Good luck!

Answer 2

If I am correct, a 403b is equivalent to a 401k and the same rules apply. You can not withdrawal any money until you are 59 1/2 without penalties. I do not know any thing about Lincoln Financial so I can not give you any advice about them. Your high risk option is good for the time period that you are in. I would switch it over to medium risk as you cross the 50 years old threshold, say in about 10 years. Than, about 57 I would switch it to low risk to minimize stock market fluctuations taking a large chunk out of your savings. Saving about 10% of your income in a retirement account is what most financial experts suggest. The best is to put enough in until it hurts than add 1% to make sure that you will be covered in the future. Forget that most experts say that you only need about 70% of your current income to live since most early retires tend to travel and than the added expense of health care as you get older will mean that your needs should match what you make today or exceed it in retirement. I would not rely on Social Security if I was you.

Answer 3

Time is as much for you as it is against you. With 20 years of planned working before retirement, I would recommend that you start putting a higher percentage to the conservative side, that way you do not have to perhaps waste time making up what you lost. Lincoln Financial I am sure is a good company, it is a matter of what your options are. I would at least put in the amount your company is matching as that is "free" money. Don't throw that away. 403b is a qualified plan so to avoid penalties you should not access this money before age 59 1/2. Otherwise the only way to avoid the penalties would be to consider what is called a 72t.

I hope this helps. Let me know if you need more information.

Answer 4

If you retire early and want to draw money before I believe 59 1/2 (don't ask me why that age, i just worked for 3 yrs for a guy who managed retirement accounts) then there's a 10% penalty as well as additional taxes on the money. After age 70 1/2 (again, don't ask why), you HAVE to make minimum required distributions from your money or get penalized.

Normally, you would choose the high risk option if you are less than 35 yrs old, the medium risk from about 30 to 55, and the low risk over that. My dad set me up with a Roth IRA at 18 and put it at high risk. When the stock market dropped after 9/11, it lost 25% of its value, from 4k to 3k. It's still not back up to 4k, and it's been nearly 5 years. We worked with Lincoln, and when I was working for him, they were really bad on not keeping track of paperwork, but then so were we. Make sure to keep track of all your statements and keep copies of any requests you send them. You should also be able to allocate money more than just 3 ways, perhaps with half in high risk and half in medium, or something like that. Keep in mind that high risk SOMETIMES has high returns and sometimes has high LOSSES. I personally would rather see my money grow slowly, but keep growing than risk losing money.

As for cashing out, I recommend you don't do it, even if you leave the company. Most places will let you keep the account, and you can always roll it over into another account if you leave for another job.

Answer 5

I'm not sure, but I think you can take you're money out at 59 1/2. I think you are wise to invest in a 403B, especially when your employer is matching you up to a percentage. So far as Lincoln Financial is concerned, I can't help you. I wouldn't put all my eggs in one basket, though--I wouldn't have all my investment in the high risk. Good luck. You're doing the right thing. You don't have to pay income taxes on this money until you start withdrawing it, which is another benefit.

Answer 6

first of all, because it is purely Yahoo! solutions, take this for what that's nicely worth. you receives a lot extra valuable customized suggestion with the help of seeing an consultant. in case you've been in the Columbus, OH section, i ought to help you. besides, the following should be my suggestion: once you're making $70K in accordance to year and own your position loose and sparkling, you should actually make a contribution a lot extra on your 403b. you at present haven't any tax benefit because you have not any interest to deduct. with the help of making an investment 20% of $70K, that should be $14K, that's extremely below the utmost allowable contribution in accordance to year. Your taxable earnings ought to then in common words be $56K and ought to get you right into a decrease bracket. With in common words $51K on your account, you should opt to make a contribution extra to retire at age sixty 3. At 40 2 years of age, you do have time to get over a marketplace downturn yet i'd shift a touch from those extreme probability investments into large cap money. this can get you remote from this style of concentrated position. relying on how a lot you've in bonds, this can diversify your investments. If the extra retirement account is a Roth IRA, shop that going to spread your retirement earnings round (Roth distributions are tax loose upon retirement compared to taxable distributions out of your 403b). The worst that ought to ensue is you realize that putting 20% into your account is purely too a lot and also you decrease it to a delicate element. because you've so few economic household projects, you're in a acceptable position to stuff quite some money away for in the previous retirement. good success! Ron, ChFC

Answer 7

You can't withdraw it until you retire unless you take out a loan on the money. If you take it out before retirement, you have to pay taxes on it. You should be able to take it with you from job to job, however, so I wouldn't worry too much.

Answer 8

kinda too late to ask aint it? MORON. I got a bridge to sell ya