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Today, most people who are planning to retire count on a combination of their 401(k) plan, their IRA, social security and (if they’re lucky) some supplemental mutual fund accounts. Typically, little thought or effort has gone into coordinating the effectiveness of these resources. That is, until it’s too late!

If you are planning to retire any time soon, make sure you understand and account for the reality of inflation. You may want to address this yourself… or maybe you will hire a financial planner. Regardless, make certain inflation is factored into your equation for future income requirements.

The combination of higher inflation plus flat stock and bond markets can devastate your standard of living. While it’s true some investors will find a way to beat market indices, the average guy or gal will have a tough time.

There is a reason why you don’t have direct control over the monies in your 401K plan. It’s because, technically, it’s not your plan.

Since the 401K plan is sponsored by your employee, you don’t actually own the assets in your 401K plan. The plan owns them. That’s why the 401 K rollover rules don’t permit you to directly rollover the the monies yourself. The only entity with the authorization to do that is the trustee who is the administrator of the plan. This accounts for the additional difficulty in accessing and rolling over monies in a 401K plan.

But, all in all, it’s simply another level of oversight or bureaucracy that you have to go through. For many people, the 401 k rollover is ideal because it allows you to transfer your existing retirement account into another retirement account without being subject to unnecessary taxes or withdrawal penalties.

“If an employer declares bankruptcy, it will generally take one of two forms: reorganization under Chapter 11 of the Bankruptcy Code, or liquidation under Chapter 7. A Chapter 11 (reorganization) usually means that the company continues in business under the court’s protection while attempting to reorganize its financial affairs. A Chapter 11 bankruptcy may or may not affect your pension or health plan. In some cases, plans continue to exist throughout the reorganization process. In a Chapter 7 bankruptcy, the company liquidates its assets to pay its creditors and ceases to exist. Therefore, it is likely your pension and health plans will be terminated.

See article at  401K Rules and Employer Bankruptcy – How it affects you

A 401k plan also has restrictions on how the money can be used and what it can be used for. Normally, you are prohibited from making withdrawals from the plan until you reach age 59 1/2 except in the case of special circumstances. Many employers do, however, have rules in place that allow you to borrow from the plan with additional rules indicating how it is to be repaid. In recent years, because of financial difficulties, many families have found themselves dipping into their 401k plans to make ends meet. This, however, should always be a last choice of funds because when you borrow against your 401k, you are putting your future retirement plans in jeopardy.

Read more at what is 401K plan?