Blue Ocean Global Wealth
Certified Financial Planner
Marguerita M. Cheng is the Chief Executive Officer at Blue Ocean Global Wealth. Prior to co-founding Blue Ocean Global Wealth, Marguerita was a Financial Advisor at Ameriprise Financial and an Analyst and Editor at Towa Securities in Tokyo, Japan. Marguerita is a spokesperson for the AARP Financial Freedom Campaign and a regular columnist for Kiplinger. She is a CFP® professional, a Chartered Retirement Planning CounselorSM, a Retirement Income Certified Professional® and a Certified Divorce Financial Analyst.
As a Certified Financial Planner Board of Standards (CFP Board) Ambassador, Marguerita helps educate the public, policy makers, and media about the benefits of competent, ethical financial planning. She serves as a Women’s Initiative (WIN) Advocate and subject matter expert for CFP Board, contributing to the development of examination questions for the CFP® Certification Examination. Marguerita also volunteers for CFP Board Disciplinary and Ethics Commission (DEC) hearings. She served on the Financial Planning Association (FPA) National Board of Directors from 2013 – 2015 and is a past president of the Financial Planning Association of the National Capital Area (FPA NCA).
Marguerita studied at Keio University in Tokyo, Japan, and earned her B.S. in Finance and her B.A. in East Asian Language and Japanese Literature from the University of Maryland, College Park. She is a recipient of the Ameriprise Financial Presidential Award for Quality of Advice and the prestigious Japanese Monbukagakusho Scholarship.
Marguerita’s mantra is “So many people spend their health to gain wealth, and then have to spend their wealth to regain their health” (A.J. Reb Materi).
BS, Finance, Keio University
BA, East Asian Language & Japanese Literature, University of Maryland
Why I AM Different - Rita Cheng
Three Cs of Financial Planning - Rita Cheng
- See all videos on Guidevine »
Great question. 401(k) loans, unlike 401(k) early withdrawals do not cause tax consequences when the proceeds are distributed. With a 401(k) loan, you are borrowing from your retirement funds, but you still must pay interest. The interest rate that you incur is based on the standard interest rate plus an extra one or two percent. 401(k) plans are designed to allow you to accumulate wealth on a tax-deferred basis for your retirement. Taking a loan can compromise one of the most exciting features of these plans: dollar cost averaging because you will need to make sure you have enough money coming out of your paycheck to cover the loan payment. Consequently, you may not be able to contribute as much to plan. If you do find yourself in a bind and need to borrow from your 401(k), you will eventually pay yourself back and build up your retirement savings and you will pay yourself interest on a tax friendly manner.
Provided that the employer or sponsor of the 401(k) plan offers loan privileges, employees may borrow up to 50% of their vested account balance up to a maximum of $50,000. If the employee has taken out a 401(k) loan within the past twelve months, he/she can borrow fifty-percent of the vested account balance not to exceed $50,000, less the outstanding balance on the existing loan. 401(k) loans must be paid back over the next five years with the exception of loans for first time homebuyers.
- Anyone who is younger than 62 as of 12/31/15 will not be allowed to collect just spousal benefits. If he/she is entitled to both a retirement benefit on his/her own earnings record and a spousal benefit (because they were married for at least 10 years to someone who is eligible for benefits), he/she will be deemed to file for both benefits at the same time, and will receive the higher of the two amounts.
- They can no longer claim spousal benefits only.
- Clients born on or before January 1st, 1954 still have access to the Restricted Application, and those born after do not.
Unfortunately, due to the Bipartisan Budget Act, you file no longer be able to take advantage of file and suspend.
I am not certain of your overall household income, but I will do my best to answer your question. For tax year 2016, the he contribution limit for employees who participate in 401(k), 403(b), and 457 plans is $18,000.
The catch-up contribution for employees 50 and over who participate in 401(k), 403(b), and 457 plans is $6,000.
The limit on annual contributions to an IRA or Roth IRA is $5,500. The additional catch-up contribution for individuals aged 50 is $1,000. For married filers, the phase-out for Roth IRA starts at $184,000. You can defer as much as $24,000 to your company's 401(k). You can contribute to either a 401(k) and Roth 401(k), provided your employer offers both options. You cannot contribute more than $24,000 combined. You can also contribute to a Roth IRA, provided you satisfy the income requirements.
As a self-employed individual, the maximum contribution to a SEP IRA for 2016 is 25% of compensation, up to $53,000. In 2016, the maximum compensation limit is $265,000. SEP IRA are pre-tax contributions. For single filers, the phase-out starts at $117,000 and they become ineligible to contribute at $132,000. For married filers, the phase-out starts at $184,000, and they become ineligible at $194,000. Provided that you meet the income limits, you can also contribute to a Roth IRA. In 2016, the maximum contribution for taxpayers over 50 is $5,500 base contribution + $1,000 catch-up contribution = $6,500. So, yes- you can accumulate more wealth for retirement by taking advantage of tax-deferred and tax-free investing!