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Is your investment account FDIC insured?

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An investment account is not FDIC insured like a bank account. So make sure to plan accordingly and understand the risks before making any retirement investment.

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If you are under 50, what is the maximum amount you can contribute to your 401 (k) annually?

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For 2016, the IRS allows you to contribute up to $18,000, as long as you don’t exceed your earned income for the year. If you are older than 50, you can contribute an additional $6,000 per year. Additionally, employer contributions through a match program don’t count toward the limit.

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Key Takeaways

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  • Understand options such as a tax-advantaged retirement account like a Roth IRA, Traditional IRA or 401(k)
  • Aim to set aside some of your income for retirement
  • Take advantage of your company’s matching contribution to a 401(k) if available. Always try to get the maximum matching contribution
  • No matter what type of retirement account you have, there are still tax rules that apply. Some require participants to pay taxes upon contributing and others when they withdraw. Check with your tax advisor to see which is right for you.
  • If you withdraw from your 401(k) before the age of 59 1/2, you may have to pay a 10% additional tax in addition to income taxes