Not all 401(k) plan participants are completely educated about their 401(k) plans and really do have a lot of misconceptions about it. So how much do you really know about your 401(k) plan? Let’s find out.
The entire 401(k) account is mine when I quit the job: This is one of the biggest mistakes one could make in his/her 401(k) retirement planner. This may OR may not be true, depending on your 401(k) plan’s vesting schedule.While your own (Roth/pre-tax) contributions to the plan are always yours to keep, it is not always the case with employer contributions. While some employer contributions are also owned by employees, there are others which require employees to have up to 6 years of service before they’re entitled to employer contributions completely.
The 401(k) is a great method to save for first home, college, etc.: Many people think that 401(k) plans can be used for other major things such as paying for a down payment for a home or for college tuition. However, 401(k) plans should be solely focused on retirement nest eggs and savings. If you want to fund your child’s college education, try the 529 plan, but leave your 401(k) alone because if any dire need arises in the future, you’ll be left without savings.
Contribute to my 401(k) plan doesn’t allow me to contribute to an IRA: Employees need to understand that 401(k)s and IRAs are different and their contributions to a 401(k) plan have no effect on if they wish to contribute to a Roth or a traditional IRA. However, one needs to remember that their/their spouse’s participation in a 401(k) plan, depending on their joint income, may unfavorably impact their capability to deduct contributions to a traditional IRA.
Minimum contributions to 401(k) are the maximum company match: Many employees believe that they should contribute to the 401(k) just only how much the company contributes, which is 6%. The result is just 6% in employee contributions, which should ideally be an average of 15% at least, and forget about how much the employer is contributing.
Two jobs with two 401(k)s allow me to defer up to $18,000 per plan: This is a smooth assumption on part of the employee, but that is not the case. The limit is $18,000 deferment limit on ALL your employer plans including the 401(k), Simple plans, SARSEPs and 403(b)s (excluding 457(b)s). If you’re lucky enough to have both a 401(k) and a 457(b), you can defer up to a maximum of $36,000 in 2017 (excluding catch-up contributions).
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.