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Video instructions and help with filling out and completing Where Form 8815 Withdrawal

Instructions and Help about Where Form 8815 Withdrawal

Here's ago number one my name is derek ifasi I'm the owner of a foxy Financial Group and retiresharp.com today's topic I want to discuss with you 401k withdrawals after the age of 60 now essentially how an individual situation works is a person is working for a company most likely a private institution that is giving them different employee benefits so such as their health insurance disability insurance ancillary products and then also a benefits package that's known as a 401k a type of retirement account that somebody could contribute into so as an individual is working for this company they are paying this individual a salary and now this person can take a portion of those dollars and place it into this type of retirement account that's deemed the 401k so the reason why somebody does this is because it kind of forces them to save it says ok well we're going to take this directly out of your paycheck so it's as if it was never hitting your bank account so you're not it's kind of out of sight out of mind type concept so throughout the years of this person's working you know 5 10 15 20 30 years let's say you start at age 30 and now he's age 60 he would have been placing these small micro amounts into his 401k plan dependent on how much he was placing in there he or she was placing in there and it's going into this retirement account so in theory if this retirement account is 401k account is placed into a fixed account let's say that's only paying 1% the amount of dollars that are being placed into that plan and this percentage rate being placed into this plan are going to grow this bucket year by year by year it's going to grow a larger and larger and larger now this percentage rate is very important because this is where individuals are you know are trying to really put the pedal to the metal and take some risks so that's why this percentage rate is linked to the mutual funds that the 401k plan provider basically provides for them so they might say ok you have in between 5 to 20 different mutual fund options target date funds you know aggressive funds conservative funds etc and what we're going to do is give you this platform based upon your risk tolerance on which funds to choose so that if you're placing let's say ten thousand dollars a year into a plan and you're getting a percentage rate that has a positive rate of return because of this mutual fund performance well then that's going to be ten thousands going into the bucket and let's say if you had a ten percent gain into it then it's going to show as if eleven thousand dollars is in that bucket at the end of that day at the end of the year this percentage rate when it's tied to mutual funds can be positive and it can be negative and you know this is just a kind of a refresher course of where you guys are right now if you're looking at this video most likely eight sixteen you're saying Wow okay now I have to actually start planning up for retirement I was saving these dollars each and every month each and every year to my 401k account my 401k account was receiving positive interest credits but then also any time that these mutual funds were the market because these mutual funds are typically tied to a mixture of stocks and bonds types of the market anytime the market went down I saw a negative to my account portfolio so in 2022 as a prime example individuals might have walked into the year with $500,000 in their 401k accounts thinking okay great I'm going to retire you know the market has always been up I've always be received positive interest credits and then they got hit with a negative 50% and what that did was it taught individuals the realization of investing and it said something more than a stock market casino and when that market took the hit they walked into the year with 500,000 it took the hit they walked out of the year with you know 250 or 300 thousand and they lost all that value regardless of how many years they've contributed into the account because this dollar amount was negative or sure I said the percentage amount was negative so when somebody is gearing up for retirement it's known as an accumulation phase they're trying to accumulate their dollars into that plan of trying to place as many dollars aside try to hope for as good of growth as possible to make sure that that bucket is going to be the largest amount possible you know by the time they hit age 60 so whether this person's looking to retire at age 60 or you know wait till age 60 to match it up with Social Security 66 67 70 etcetera there has to be a change in mindset from an accumulation stage if they're looking to pull this out for income to more of a preservation preserve your account eliminate those negatives distribution make sure that you're receiving an income from that 401k as well from those those 401k monies as well after age 60 and the reason why I say after age 60 is because with 401k accounts there's something known as a 59 and a half rule and a 70 and a half rule the dollars that are placed into this 401k account are going in there something known as pre-tax so if someone's placing ten thousand dollars into a into a 401k account each year and they made a hundred grand that year well their adjusted gross income at the end of the year is ninety thousand dollars this $10,000 was known as a tax deduction.

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