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Check 401k Balance

In this time, it is important to check 401k balance just to have an idea of how your retirement investments are faring in this financial storm. Every day seems to bring a new financial crisis. Banks are closing left and right, and the stock market seems to hit an all new low at the close of every day.

Although you may not want to know, it’s important to keep tabs on your 401k retirement account. Many plans send monthly or quarterly statements that allow investors to check 401k balance on a regular basis. Others allow investors to check the fund’s website for a real time account of how their investments are doing. Sometimes you will need to make a phone call to a fund administrator to check 401k balance.

Once you have found your 401k balance, you should try not to panic. Most investment accounts are down because of recent changes in the stock market. Although it is easy to feel anxiety at the thought of losing valuable investment funds, it’s important to remember that the stock market always recovers eventually. 401k investors have an additional bonus, because they will continue to buy stock at today’s low prices. This stock has nowhere to go but up, practically guaranteeing huge returns. While it may be necessary to check 401k balance just to know where you stand, you should never let the information scare you away from making smart financial decisions.

Although you may be tempted to withdraw money from your account just to protect your retirement income from further losses, this is a very bad idea. Just as the IRS offers tax breaks to encourage investors to invest in a 401k retirement account, they discourage early withdrawal with huge penalties. Withdrawing money from a 401k retirement account before you reach full retirement age will usually force you to pay ten percent of your money in early withdrawal along with another ten percent in taxes. That makes a total of one fifth of both your principal and your earnings. You will also have to pay income tax on any earnings your account made while it was tax deferred, although this would be minimal at the current low market value. Still, you will be paying a sizeable part of what’s left of your 401k in taxes and penalties.

However, many families are dealing with hardships that may shield them from these penalties. You can avoid paying the penalties for 401k early withdrawal if you are having one of a set list of financial hardships, which include high medical bills, disability, college tuition, or buying your first home. Although you would benefit most from leaving your money in the investment account where it is sure to rebound back to its former level, you can legally remove the money if it is needed.

When you check 401k balance, try to stay calm and remember that your money will be back before you know it. The up and down movement of the stock market is precisely what makes it a great place for retirement funds to grow. By the time you are ready to retire, your account will be better and richer for this temporary dip in the economy.

Check 401k Balance
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