OneAmerica 401(k): A Comprehensive Guide to Retirement Planning

Introduction

Retirement planning is an essential aspect of financial well-being. OneAmerica, a leading provider of retirement solutions, offers a 401(k) plan tailored to help individuals build a secure financial future. This article provides a comprehensive guide to the OneAmerica 401(k), exploring its features, benefits, and investment options.

What is a OneAmerica 401(k)?

A 401(k) is a tax-advantaged retirement savings plan offered by employers. OneAmerica's 401(k) plan allows employees to contribute pre-tax dollars from their paycheck to an individual account. These contributions grow tax-deferred, meaning individuals pay no taxes on the money until it is withdrawn in retirement.

Benefits of a OneAmerica 401(k)

Tax Savings

One of the primary benefits of a OneAmerica 401(k) is the tax savings it offers. Contributions are made pre-tax, reducing an individual's current income and potentially lowering their tax bracket. In addition, the earnings on the invested funds grow tax-deferred, further increasing potential savings.

Employer Matching

Many employers offer matching contributions to their employees' 401(k) plans. These contributions are made by the employer directly into the employee's account and provide a significant boost to retirement savings. According to the Plan Sponsor Council of America, "employers contributed a median of $1,056 to 401(k) plans in 2020."

Retirement Income

A OneAmerica 401(k) provides a source of income during retirement. Individuals can choose to withdraw funds from their account as needed, using a variety of withdrawal options such as monthly payments or lump sum distributions.

Investment Options

OneAmerica offers a diverse range of investment options within its 401(k) plan. These include:

• Mutual funds
• Target-date funds
• ETFs
• Stocks
• Bonds

Individuals can choose from a variety of investment options based on their risk tolerance, time horizon, and financial goals. OneAmerica's financial advisors can provide guidance and assistance in making investment decisions.

Features of the OneAmerica 401(k)

Employee Loans

The OneAmerica 401(k) plan allows participants to take loans from their retirement savings for qualified expenses such as education, home purchases, and medical emergencies. These loans must be repaid with interest, and the maximum loan amount is typically capped at a percentage of the account balance.

Hardship Withdrawals

In cases of financial hardship, individuals may be eligible to take hardship withdrawals from their OneAmerica 401(k) account. However, these withdrawals are subject to taxes and penalties, so it is important to consider all other options before resorting to this measure.

Roth 401(k) Option

OneAmerica also offers a Roth 401(k) option. With a Roth 401(k), contributions are made after-tax, meaning individuals pay no taxes on the contributions themselves. However, the earnings on these contributions grow tax-free and can be withdrawn tax-free in retirement.

Tips and Tricks for Maximizing Your OneAmerica 401(k)

Contribute as Much as Possible

The more you contribute to your OneAmerica 401(k), the greater your potential savings for retirement. Aim to contribute at least 10% of your income, and take advantage of any employer matching contributions.

Diversify Your Investments

Diversifying your investments helps reduce risk and increase the potential for growth. Consider a mix of stock and bond funds, as well as target-date funds that automatically adjust your investments based on your age and retirement goals.

Rebalance Your Portfolio Regularly

As your investment goals and risk tolerance change over time, it's important to rebalance your portfolio. This involves adjusting the allocation of your assets to ensure it remains aligned with your objectives.

Consider a Roth Option

If you qualify, consider contributing to a Roth 401(k) to take advantage of tax-free earnings and withdrawals in retirement.

Take Advantage of Employer Matching

If your employer offers matching contributions, make sure to contribute enough to receive the maximum match. This is essentially free money that can significantly boost your retirement savings.

Pros and Cons of the OneAmerica 401(k)

Pros:

• Tax savings
• Employer matching
• Variety of investment options
• Retirement income
• Employee loans and hardship withdrawals

Cons:

• Fees and expenses
• Withdrawal restrictions
• Limited investment options compared to some individual IRAs

FAQs

1. What is the maximum amount I can contribute to my OneAmerica 401(k)?

The annual contribution limit for 2023 is $22,500, plus a $7,500 catch-up contribution for individuals age 50 or older.

2. How do I withdraw funds from my OneAmerica 401(k)?

You can withdraw funds from your OneAmerica 401(k) account after you reach age 59 1/2, or upon separation from service. Withdrawals are subject to income taxes and may be subject to penalties if taken before age 59 1/2.

3. What are the fees associated with the OneAmerica 401(k)?

Fees associated with the OneAmerica 401(k) may include administrative fees, investment management fees, and transaction fees. These fees can vary depending on the investment options selected.

4. How do I enroll in the OneAmerica 401(k) plan?

You can enroll in the OneAmerica 401(k) plan through your employer. Your employer will provide you with enrollment materials and instructions.

5. What are target-date funds?

Target-date funds are a type of mutual fund that automatically adjusts its investment allocation based on your age and projected retirement date. As you get closer to retirement, the fund will shift its allocation to more conservative investments.

6. Can I transfer my OneAmerica 401(k) to another plan?

Yes, you can transfer your OneAmerica 401(k) to another plan through a process called a rollover. However, it is important to note that rollovers may be subject to taxes and fees.

7. What is the difference between a 401(k) and an IRA?

401(k) plans are offered by employers, while IRAs are individual retirement accounts. 401(k) plans typically offer a wider range of investment options and employer matching contributions, while IRAs have higher contribution limits.

8. What is a hardship withdrawal?

A hardship withdrawal is a withdrawal from a retirement account that is made due to a financial emergency. Hardship withdrawals are subject to taxes and penalties, so it is important to consider all other options before resorting to this measure.

Conclusion

OneAmerica's 401(k) plan is a valuable tool for retirement planning. By taking advantage of the tax savings, employer matching, and investment options it offers, individuals can build a secure financial future. Remember to contribute as much as possible, diversify your investments, and take advantage of the resources available to you. With careful planning and execution, the OneAmerica 401(k) can help you achieve your retirement goals.

Additional Information

Table 1: Historical 401(k) Contribution Limits

Table 2: Comparison of 401(k) and IRA Contribution Limits

Table 3: Average 401(k) Account Balances by Age

Table 4: Impact of Employer Matching on Retirement Savings