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Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
<h2>Leave It Where It Is</h2><p><a href="https://www.irs.gov/retirement-plans/401k-resource-guide" rel="noopener noreferrer" target="_blank">401k plans</a> differ based on the employer, but most will give you the option to leave your 401k where it is even when you don't work for them anymore.</p><p><div id="ezoic-pub-ad-placeholder-129" style="width: 100%;"> <!-- /10937338/Paypath/post-page-in-content-1 -->
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<!-- End Ezoic - In-Content 1- mid_content --></p><p>Depending on the 401k's money options, your money might be better off in the investments at your old job than moving it elsewhere. If you are happy with the investment options in the existing 401k, but not necessarily with your other options, it may be best to stay put. I personally did this with an ex-employer's 401k, because I was happy with the expense ratios and investments they offered. </p><p>Larger employers tend to offer 401k programs at lower fees. Compare any fees from your previous employer's 401k plan to whichever vehicles you are considering transferring to first. To do so, check the expense ratios of the mutual funds offered in both plans. </p><p><div id="ezoic-pub-ad-placeholder-131" style="width: 100%;"><!-- /10937338/Paypath/post-page-in-content-2 -->
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<!-- End Ezoic - In-Content 2 - long_content --></p><p>Depending on how much money is in your 401k at the time you leave, it may not be a good idea to leave it and do nothing. Often, accounts with balances of $5,000 or less may be closed automatically. If this happens, the employer may end up sending you a lump sum check, or deposit the money into an IRA in your name. It's best to check with your employer first.</p><p>Know that you won't be able to make more contributions to the existing 401k once your employment ends. Withdrawal options are also limited. 401k benefits, such as retirement loans, are usually not allowed once you are no longer actively participating in the plan.</p><h2>Roll It into a 401k with Your New Employer</h2><p>Simplicity is the key to easy 401k management. The standard routine for 401ks when you switch jobs is to roll it into your new employer's retirement plan. </p><p><div id="ezoic-pub-ad-placeholder-133" style="width: 100%;"><!-- /10937338/Paypath/post-page-in-content-3 -->
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<!-- End Ezoic - In-Content 3 - longer_content --></p><p>Having just one 401k to manage can be beneficial if you don't continuously dedicate time to review all your accounts. However, as we mentioned before, you should closely compare expenses and investment options before making that decision. </p><h2>Roll It into an Individual Retirement Account (IRA)</h2><p>You also have the option to roll over the funds from your 401k into an <a href="https://www.fidelity.com/building-savings/learn-about-iras/overview" rel="noopener noreferrer" target="_blank">IRA account</a> with a bank or brokerage firm, where your money will continue to grow tax-deferred.</p><p>One possible benefit of an IRA rollover is the plethora of investment options available to you. Many 401ks are limited to just a handful of mutual funds and bonds, whereas IRAs give you more choices. </p><p>Likewise, many 401ks limit the number of times in a year you can make investment changes (known as portfolio rebalancing). With IRA accounts, you're not limited to a select amount of times you can make such changes, giving you more freedom and flexibility with an IRA.</p><p>Many brokerages and banks are known for giving out incentives to new customers — and there's no shortage of handouts when it comes to opening a new IRA with them. You may be able to snag yourself a bonus while gaining more control over your retirement money. </p><p>As promising as IRA rollovers can be, it's not always going to be the best option for 401k funds. For example, let's say you've left a job for another and you're debating moving your previous 401k into an IRA or your new employer's plan. Always take into consideration employer matching contributions. Most employer's 401k programs will contribute a certain percentage or match what you put into the account. For example, let's say the program will match up to 6% of your contributions, and you contribute 6% of your salary that year which ends up being $3,000. With the employer matching contributions, you end up gaining another $3,000 for the year. If you choose the IRA, you could possibly miss out on a ton of money. </p><h2>Take the Money</h2><p>You always have the option to simply close out your 401k when you leave your job, but this is almost always a bad choice. </p><p>If you decide to take the cash when you aren't 59 ½ or older, then you will end up paying an <a href="https://www.irs.gov/newsroom/early-withdrawals-from-retirement-plans#:~:text=If%20a%20taxpayer%20took%20an,Nontaxable%20Withdrawals." rel="noopener noreferrer" target="_blank">excessive amount of taxes along with penalty fees</a> that are usually around 10%.</p><h2>Your Next Steps </h2><p>Once you have decided which rollover option to take, your first step is to set up the new account. When the account is opened, the new provider will provide you with instructions to transfer the money. Usually, this means you are in charge of contacting the former employer's plan administration and letting them know you need to make a direct rollover. </p>
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With the election of Joe Biden to the Presidency, you're probably here seeking to understand how much your taxes are going to go up.
The answer: most people will see no tax increases.
The tax plan that Joe Biden has rolled out is targeted at individuals making more than $400,000 a year, less than 1% of the population of the US. If you (like me) are not one of these lucky individuals, then it's very-likely that nothing in this article is going to apply to you.
But, for argument's sake, let's hop in the Model S, drive over to the penthouse, and analyze what Biden's tax code plans mean for you.
<h2>If you make over $400,000 a year</h2><p>First, Biden is going to impose a 12.4% tax on incomes over $400,000 to fund Social Security, split evenly between employers and employees. This is a new tax, because Social Security taxes in the past have been capped on income at or below $137,700. </p><p>People who made over $137,700 had a tax break where they didn't have to pay into Social Security for all of their income. Biden's tax plan still allows people making over $137,700 to not pay the Social Security payroll tax for income above that amount as long as they make under $400,000. </p><p><div id="ezoic-pub-ad-placeholder-131" style="width: 100%;"><!-- /10937338/Paypath/post-page-in-content-2 -->
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<!-- End Ezoic - In-Content 2 - long_content --></p><p>When your income exceeds $400,000, you then have to start paying the tax again. This creates an interesting tax structure where people's income at the very bottom and the very top of their income is being taxed for Social Security, but income in the middle is not.</p><p>Second, while Biden is likely to keep many of changes from the Tax Cuts and Jobs Act, he has stated that he is going to revert the marginal tax rate for individual incomes above $400,000 from 37% back to the previous 39.6%. As with the Social Security tax, this does not kick in unless your income goes above $400,000.</p><p>Individuals making above $400,000 will also have their incomes above $400,000 see itemized deductions capped at 28%. That means if your income is over $400,000 and your tax rate is over 28%, you have less options for itemizing your deductions to get a lower tax rate.</p><p><div id="ezoic-pub-ad-placeholder-133" style="width: 100%;"><!-- /10937338/Paypath/post-page-in-content-3 -->
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<!-- End Ezoic - In-Content 3 - longer_content --></p><p>Some business owners have benefitted from deducting up to 20% of their business income as well as 20% of the dividends from qualifying Real Estate Investment Trusts (REITs) on their taxes. Biden is proposing phasing that out for incomes above – drumroll - $400,000.</p><p>But what if you're not just making $400,000 a year? <strong>What if you are making even more than $400,000 a year? What if you earn over $1 million a year?</strong> That's when Biden's really going to hit you where it hurts – your investments.</p><p>Most people pay taxes on what's called "earned income," referring to things like your salary at your job. The tax rates for that range from 10% to 37%, depending on how much you make. If you make money from investments instead, that's a whole different story. </p><p>If you buy an investment and sell it for a profit within one year of purchase, you would pay your normal income tax on any profit you make. But if you hold the investment for longer than a year, you pay a reduced tax rate between 0% and 20%, depending on your income. </p><p>If you make over $200,000 ($250,000 for married couples), you would also pay a 3.8% tax on net investment income. What Biden is proposing is taxing any income over $1 million the same regardless of it comes from your salary or your long-term investments. </p><p>The wealthiest people in the US have seen a large amount of their income come from investments, and this measure would keep the wealthiest Americans from paying less in taxes than average working people just because the money comes from holding stocks or real estate instead of a traditional job.</p><h2>If you make under $400,000 a year</h2><p>Let's say that you, like more than 99% of Americans, do not make $400,000 a year. Does this mean Biden's tax plan will not affect you at all? There's actually a decent chance you might see some changes to your taxes.</p><p>Biden is proposing bringing back the First-Time Homebuyers' Tax Credit, originally created to help the housing market during the Great Recession, and provide up to $15,000 for first-time homebuyers. With interest rates at historic lows, this may be another incentive for you to consider dipping your toes into the real estate game and becoming a homeowner.</p><p>Biden is also proposing expanding the Child and Dependent Care Tax Credit from $3,000 up to $8,000 for one dependent and $16,000 if you have multiple dependents. The maximum reimbursement rate would also adjust from 35% to 50%. If you have kids or other dependents, this may reduce how much you pay in taxes by giving you a child tax credit the money you spend to support your family.</p><p>Biden also has a few very targeted tax cuts and tax benefits that will apply to a much smaller group of people. One is expanding the Earned Income Tax Credit (a tax credit for low-income people who are very close to the poverty line) and allowing people over the age of 65 to also claim the credit even if they do not have dependent children. </p><p>He would also provide a refundable low-income renter's credit, reinstate tax credits for the purchase of electric vehicles and improvements to your home to make them more energy-efficient, as well as exempt forgiven student loans from taxable income. These may not apply to as wide a group of people, but <strong>if you're older, a renter, looking to live a more green lifestyle, or seeking forgiveness for student loans, Biden's tax proposals can have you looking at a smaller tax bill.</strong></p><p><strong><br></strong></p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDc2ODM3NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNDEzNDA0Mn0.5xjQgThXHlmPT9JREdNmZmbopjeazhRO1N5IlOl3qU4/img.jpg?width=980" id="a93cd" class="rm-shortcode" data-rm-shortcode-id="887b35eeae4630b67d83d992815dc29b" data-rm-shortcode-name="rebelmouse-image" alt="Biden Tax Plan" data-width="1440" data-height="907">
</p><p><br></p><h2>Biden's plans for inheritances</h2><p>At first glance, it looks like everyone making more than $400,000 a year will pay higher taxes and everyone else will pay less taxes than they currently do. However, there is a part of Biden's tax plan that may have an impact on you even if you are lower income – if you have a rich family.</p><p>The Tax Cuts and Jobs Act raised the threshold at which estate taxes are paid and lowered how much they have to pay in taxes. If you stand to inherit an estate worth $11.6 million dollars today ($23 million if you are a married couple), right now you don't pay taxes on it. </p><p>If you inherit more than that, you would pay a top rate of 40% tax. Biden is proposing lowering the threshold where the tax would kick in back down to $3.5 million ($7 million for married couples) and raising the tax rate back to 45%. This will affect roughly 0.3% of estates. <strong>If you are in the 99.7%, you do not need to worry about the Biden inheritance policy.</strong></p><p>Now, the next part is closing an inheritance loophole called the "stepped-up basis" loophole. Right now, when an heir inherits an asset, they only pay taxes on the gain in value of the asset from the time that they inherited it. </p><p>Let's say your parents bought $100 worth of stocks decades ago and today those stocks are worth $10,000. If your parents passed away and left you the stocks, you would be allowed to sell them immediately and not pay any taxes. </p><p>If you held the stock and the price rose to $12,000, you would only pay taxes on the $2,000 in value the stocks gained since you inherited it. This because the initial value of the stocks would be "stepped-up" to the value at the time you inherited it rather than the value at the time your parents bought it.</p><p>This loophole has allowed the very wealthy to leave very valuable assets to their children without needing to pay taxes and allowed generations to pass large fortunes to their children. Biden has proposed closing this loophole and not stepping-up the value of an asset when it is inherited; taxes will instead be paid on the value of the asset from when it was first purchased.</p><p>This part of the plan has yet to be fully fleshed-out by Biden, but it appears to be modelled after a proposal from the Obama administration. That plan allowed an exclusion of $100,000 per person (rising with inflation) and excluding $250,000 for primary residences ($500,000 for couples). It also allowed a 15-year payment period and tax deferrals for family-owned small businesses. Biden may roll out similar provisions once he rolls his tax plan out before congress.</p><h2>Does any of the Biden tax policy outlines even matter?</h2><p>Maybe?</p><h2></h2><p>Biden has presented something of a wish list for his tax plan, but that doesn't mean he can wave a magic wand on January 20th and put it into place. This plan will require significant negotiations in Congress, and if Republicans retain a Senate majority, they may refuse to even allow a bill to have a hearing. Ultimately, Biden's tax proposals may change significantly as they work their way through Congress and if they are not able to garner enough support, they may never come into effect. </p>
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As labor market demands continue changing, redesigned job skills are working their way to the top of employers' desired skill sets for employees.
With nearly 14 million Americans currently looking for work, giving your resume an update has never sounded better! We have cultivated a list of the most coveted and in-demand job skills you should focus on developing as you prepare for a changing COVID influenced world.
Employers look for employees who possess both hard and soft skills. Hard skills are those that involve technical knowledge, while soft skills deal with personality traits.
<h2>Digital Hard Skills</h2><p class="shortcode-media shortcode-media-rebelmouse-image">
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</p><p>The global workforce was already amidst a technological revolution, but when COVID took the reins, the skill sets needed for digital work priority seemingly overnight. <br></p><p>According to <a href="https://www.linkedin.com/pulse/10-most-important-job-skills-every-company-looking-2020-bernard-marr" rel="noopener noreferrer" target="_blank">LinkedIn</a>, data literacy–which is the ability not only to read and understand data but also to apply that data in a meaningful way–is the most important skill set businesses look to attain. Special skill sets in statistics and probability are a great asset to any job in the data field. </p><p><div id="ezoic-pub-ad-placeholder-131" style="width: 100%;"><!-- /10937338/Paypath/post-page-in-content-2 -->
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<!-- End Ezoic - In-Content 2 - long_content --></p><p>Computer programming is now, more than ever, becoming a job skill that employers desire. But you don't have to have a programming degree to pick up some basic coding skills that might help you go far. <a href="https://www.codecademy.com" rel="noopener noreferrer" target="_blank">Codecademy</a> offers free basic beginner classes that teach you how to code from the comfort of your home. </p><p>Having proficiency in computer programming languages can also get your resume noticed. According to <a href="https://www.indeed.com/career-advice/career-development/best-programming-languages-to-learn" rel="noopener noreferrer" target="_blank">Indeed</a>, Python is the highest demanded program language for jobs right now. Blockchain technology, a job skill that has never even appeared on LinkedIn's top skill demands before this year, debuted as the <a href="https://business.linkedin.com/talent-solutions/blog/trends-and-research/2020/most-in-demand-hard-and-soft-skills" rel="noopener noreferrer" target="_blank">highest demanded skill for 2020</a>. The up-and-coming Blockchain technology, which is generally associated with <a href="https://www.google.com/amp/s/www.paypath.com/amp/cryptocurrency-2646840047" target="_self">cryptocurrency</a>, is now being sought for use by businesses who are looking for innovative ways to implement new technologies.</p><p>Similarly, jobs dealing with artificial intelligence have shown the <a href="https://business.linkedin.com/content/dam/me/business/en-us/talent-solutions/emerging-jobs-report/Emerging_Jobs_Report_U.S._FINAL.pdf" rel="noopener noreferrer" target="_blank">highest rate of increase</a> in any industry in the United States this past year. Proficiency in developing algorithms and robotics can get your resume noticed fast.</p><p><div id="ezoic-pub-ad-placeholder-133" style="width: 100%;"><!-- /10937338/Paypath/post-page-in-content-3 -->
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<!-- End Ezoic - In-Content 3 - longer_content --></p><p>Finally, affiliate marketing has been one of the fastest-growing marketing sectors that businesses are developing. Business spending on affiliate marketing grew from $4.2 billion to $6.8 billion annually between 2015 and 2020. Practice and understanding of search engine optimization (SEO) and search engine marketing (SEM) are crucial job skills that can help you grow a business online. And if you have no experience with SEO, learning about it can be done for free and easily through sites such as <a href="https://moz.com/learn/seo" rel="noopener noreferrer" target="_blank">Moz</a> or <a href="https://yoast.com/academy/free-seo-training-seo-for-beginners/" rel="noopener noreferrer" target="_blank">Yoast</a>. Familiarity with online analytics such as Google and Adobe analytics will also help your resume get it noticed. </p><h2>High Demand Soft Skills</h2><p class="shortcode-media shortcode-media-rebelmouse-image">
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</p><p><br></p><h3>Cognitive Skills</h3><p>Employers have always desired some level of cognitive skill from employees. Logic and reasoning are important in a world where it seems easier to find fake news and misrepresented data, and being able to objectively sort through what is credible and what is not is a coveted job skill in today's world.</p><h3>Adaptability and Resilience Skills</h3><p>The baby boomer generation was accustomed to holding lifelong jobs, often having the same workplace and requirements throughout an entire career. In today's world, the majority of millennials prefer–or are forced into–job-hopping, so being willing to adjust to change in an increasingly changing workforce will get you far. </p><h3>Leadership Skills</h3><p>With jobs shifting to remote work-at-home settings, leadership skills will become a top job skill throughout the workforce. People who show self-management are more likely to adapt to working from home and are capable of engaging fellow teammates more effectively.</p><h3>Creativity Skills </h3><p>Artists who make a career out of their passions have long felt undervalued at what they do. But if recent closures and shutdowns have trained the job market's interests on anything good, it's been creativity, as businesses have all been forced to think outside of the box.</p>
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Will Your Business Will Receive Money from the Second Round of Small Business Loan Funding?
April 28 | 2020
A second round of emergency funding for small businesses opened on Monday.
While this news came as a relief for many small business owners, it appears that error messages and slow processing have prevented many from accessing the fund. A spokesperson for the SBA said, "The pacing mechanism prevents any one lender from submitting thousands of loans an hour into the E-TRAN system. If a lender goes above the pacing limit they will get timed out."
But CNN reports that a banking industry source said that things are actually much worse than the SBA made it seem. "The SBA system simply cannot handle the volume of applications banks have processed from America's small businesses," this person said, adding: "Unless SBA set the pace at one an hour (or less), this is nothing but misdirection. Banks are working to deliver assistance and SBA is passing the blame."
In fairness, the SBA typically hands out about $25 billion in loans every calendar year. Thanks to the global health crisis, they're now suddenly trying to get $310 billion in PPP loans out the door as quickly as possible, so delays are to be expected.
But, even more worryingly, there is a major possibility many small businesses won't see any money this time around either. The last pot of money given out to small businesses was, obviously, insufficient in addressing the needs of many American business owners impacted by the crisis. So how far will the money go this time? Multiple industry experts contacted by CNN "anticipate that this money could be gone within the week. Last time, it took 13 days, but banks have a much longer queue of customers this round."
In summary, millions of eligible businesses are not going to get PPP funding, even if they applied in a timely manner. If you've already submitted an application, all you can do now is hope and wait.
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