Archived Who Has A Target 401K Enrollment Plan?

[commiecorvus]

I used to work for a company where I had set up a 401k with but I'm not with that company anymore. I was thinking of opening one with Target. My question is, the old one is asking me if I want to withdraw the money I invested in the 401k or should I rollover to another one. I was thinking of withdrawing and then set up a new one with Target. If I withdraw, I can still set up a new one with Target, right? I know there are penalties but not sure what those penalties will be. Any advice would be greatly appreciated.

You're better off rolling it over than withdrawing it, tax wise.

 

[Hardlinesmaster]

You can transfer to Ira too.

 

[AllThingsTarget101]

I'm contributing to my 401k but did not know I could change the match. Thanks guys! Recently Target stock has gone up though, so I did make a little chunk there.

 

[APredux]

I used to work for a company where I had set up a 401k with but I'm not with that company anymore. I was thinking of opening one with Target. My question is, the old one is asking me if I want to withdraw the money I invested in the 401k or should I rollover to another one. I was thinking of withdrawing and then set up a new one with Target. If I withdraw, I can still set up a new one with Target, right? I know there are penalties but not sure what those penalties will be. Any advice would be greatly appreciated.

Your best bet is to start contributing to a 401k at Target (if you haven't already), then rolling your old 401k over into Target's. Target's 401k has really low fees and great investment options, so you can't go wrong there. If you go to the targetpayandbenefits website you can request rollover materials.

I don't advise withdrawing the money. You will get hit by taxes and an early withdrawal penalty. It makes a lot more sense to roll it over and let the money continue to grow tax-free in a 401k.

 

[AllThingsTarget101]

When do you not get hit with taxes for withdrawing? Is there ever a time?

 

[PinkZinnia]

be careful withdrawing any 401k funds - you need to talk to an accountant or financial adviser before you do. - You may have to pay taxes.. When you set up your 401k you have a choice, pretax or after tax. If you don't understand it, talk to someone first..If could have a big impact on your taxes..

If you go to another company, you can invest the 401k you presently have into the new 401k without any penalties at all.

IF you know how to work it, you can not get hit with taxes if you withdraw money between 59 and a half and 71 years old.. At 72 you have to withdraw and if it isn't set up properly you can be hit with mega taxes.

I do advise people to take advantage of any company that will match a 401k plan. Since Target isn't a top runner in the financial field, I would not suggest putting anymore then what they will match, and I would not use their advisers.. I have my own who give me sound advise.

 

[TiedAndDropped]

APredux's post above is absolutely correct, and you should follow the advice.

And rolling over one 401k into another is very easy even if you know nothing about investments etc. Open a 401k with Target, then call the number on Targetpayandbenefits.com and tell them what you want to do and they will guide you through it. Essentially you fill out a simple form that tells your old 401k what you want done, and they do it.

Target may not be a "top runner" in the financial field, but AON-Hewitt, who runs Target's 401k is, and it really is a good plan. It's the same 401k plan for TMs as for everyone in the company, right up to the top execs, and believe me, they wouldn't screw themselves.

 

[Hardlinesmaster]

APredux's post above is absolutely correct, and you should follow the advice.

And rolling over one 401k into another is very easy even if you know nothing about investments etc. Open a 401k with Target, then call the number on Targetpayandbenefits.com and tell them what you want to do and they will guide you through it. Essentially you fill out a simple form that tells your old 401k what you want done, and they do it.

Target may not be a "top runner" in the financial field, but AON-Hewitt, who runs Target's 401k is, and it really is a good plan. It's the same 401k plan for TMs as for everyone in the company, right up to the top execs, and believe me, they wouldn't screw themselves.

Hewitt is awesome!

 

[Amaazingdude]

be careful withdrawing any 401k funds - you need to talk to an accountant or financial adviser before you do. - You may have to pay taxes.. When you set up your 401k you have a choice, pretax or after tax. If you don't understand it, talk to someone first..If could have a big impact on your taxes..

If you go to another company, you can invest the 401k you presently have into the new 401k without any penalties at all.

IF you know how to work it, you can not get hit with taxes if you withdraw money between 59 and a half and 71 years old.. At 72 you have to withdraw and if it isn't set up properly you can be hit with mega taxes.

I do advise people to take advantage of any company that will match a 401k plan. Since Target isn't a top runner in the financial field, I would not suggest putting anymore then what they will match, and I would not use their advisers.. I have my own who give me sound advise.

What advisors do you use? I am currently getting around 8 percent for a rate of return using Targets advisors.

 

[PinkZinnia]

Yes a 401k for a company is usually for every one in the co.
I couldn't tell you what rate I have. Finances are dispersed. Some in high risk. Some in - as I call them, comfortable risk.
Been with my wealth advisor for a long time - she is with one of the big firms though since my divorce I'm one of her bottom people. She has dragged me with her when she has chnged investment houses. I think she feels bad for me since I will probably be scraping bottom if and when I ever get to retire and she knows I would be lost without her expertise.

 

[AllThingsTarget101]

My 401k is set to "lifepath 2055" rather than the Target common stock. This is how it was set up by default, is this how everyones starts and how do you all feel about that? Where have you diverted your investments? Thanks in advance!

 

[Hardlinesmaster]

I went for target stock.

 

[Kartman]

I'm letting it fly on autopilot.

 

[Hardlinesmaster]

I'm letting it fly on autopilot.

Just watch for negatives. Then, change it around.

 

[AllThingsTarget101]

I have a problem focusing all the investments into one company, such as Target Stock. I have not researched too much yet but it sounds like their life path option at least has a few different companies

 

[APredux]

Diversifying your investments is important to achieve the highest risk adjusted return, so investing entirely (or even mostly) in Target stock isn't usually a good idea. Putting your 401k in something like the Life path 2055 is a great "one size fits all" kind of approach. By investing in those Life Path funds, you're diversified in a large segment of the stock market, both here in the U.S. and international. It also has a certain allocation to bonds, depending on the year of the Life Path fund. The ones farther out, like 2055, will have more in stocks and less in bonds. That ratio starts changing over time as you get closer to that year, and the Life Path fund becomes more conservative.

 

[SFSFun]

I'm in my 20s, not doing so great financially, and I'm not planning to be with spot by the end of the year (although that's what I said last year...).

Would it be worth it to get a Target 401k anyways? I already have one through my other job but there is no matching contributions and it is just a small fixed amount from every paycheck.

 

[OnSix]

If you can afford it then I say go for it. Target will match up to 5% so it's like doubling your money.

 

[signingminion]

Just got junk mail from spot stating that this is now capped at 20% of your salary. I wish I could put more than 20% towards something like this and have spot match it...

 

[RedMan]

I think you misunderstood. There's a cap on the amount of Target stock you can purchase - 20% of your total contribution to the 401K. So if you were putting in 5% + Target's 5% (the max they will match) into your 401K as Target stock each paycheck, you can no longer do that. Now only 20% of the 10% can be stock; the balance has to go into the 401k mutual fund.

Example: Your pay is $500. You choose to put 5% ($25) + Target's share of 5% ($25) into your 401K. Before June, all $50 could be used to purchase Target stock. Now only $10 can buy stock; the balance goes into one of their LifePath funds.

 

[PinkZinnia]

I wonder why they are doing that? I wonder if they are afraid the stock might plummet and peoples 401K's will be worthless.. Naaa, they wouldn't care -

 

[TiedAndDropped]

I wonder why they are doing that? I wonder if they are afraid the stock might plummet and peoples 401K's will be worthless.. Naaa, they wouldn't care -

As they explain in the letter, best practice for investors is to not have too many eggs in one basket.

My father had worked for a large international company and got part of his pay as stock options, and eventually a big chunk of his investments were in that stock. After he retired I told him he should sell much of that stock and buy a more diversified portfolio. Most financial advisers say you shouldn't have more than 5% of your investments in any one stock.

Well - he said it was a great company and the stock was doing really well ($60 at the time) so he would keep it. Within a year the CEO and some other high-ups were indicted for price fixing and the stock dropped to $27 in one day - and stayed at less that $30 for the next 15 years.

The 20% limit is just forcing us to do what my father should have.

 

[RedMan]

They don't take into account that this isn't the only investment strategy that all of us have. I'd like the choice rather than going into a fund that I know nothing about.