Start A 401k

By Michael Swanson

From the time we first started working we hear about the benefits of having steady employment and look for 401 advice . One of the best known is the 401k retirement plan. This is a savings account set up by the employer that allows a certain amount of their paycheck to be deposit into the plan, before taxes. This account is set up by investment brokers and the employer to ensure that the employee has adequate residual income for their senior years.

In order for this to happen, money must be saved in a special account. Typically money deposited in the 401k retirement plan is taken directly from an employee's check. The money is taken before taxes and is matched by the company. This gives the extra incentive to invest wages, without paying taxes. There are many different advantages to obtaining a 401k retirement plan

1. Tax free investments. The few dollars invested by the employee from their paycheck doesn't seem like much, but after a few years, the money shows significant growth.

2. It allows the employee to make a few tax free investments. The 401k gives the employee the chance at dabbling into the stock market, buying bonds, and even purchasing mutual funds. They can really make the account take off by spreading their investments in many different areas.

3. It can be transferred. 401k retirement plans can easily be transferred from one company to another. It is designed to help save for retirement. The value of the retirement plan remains the same when transferred and the employee can continue to deposit money.

401k retirement plans are one of the smartest things you can participate in throughout your life. But keep in mind, this account is set up for your senior years and because of this, you should not withdrawal any before retirement age. If you meet the criteria and can withdrawal funds from the account, there are very stiff fines for this action. - 23208

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