The most commonly offered retirement plan in America is the 401k plan. A quality 401k program is one of the most effective and smartest ways to help save money for your retirement. Here are five reasons why your 401k plan is essential to your retirement
Automatic Payroll Contributions
Each contribution is automatically deducted from the employees paycheck before they see the money. Out of sight, out of mind – What you don’t receive you cannot spend! The great saving principle is to pay yourself first.
Your 401k Plan is Employees to Keep – Financial Security Over Time
Should an employee leave an employer they can take their money with them. That includes 100% of any employee contributions they have made, in addition to any fully vested employer matching contributions made on the employees behalf. Money can be rolled over into an IRA or a new employers 401k Plan if one is offered.
Before-Tax Saving
Potential With before tax saving, employee contributions can grow without being reduced by current taxes. With the added benefit of tax deferred compounding, earnings on all contributions are reinvested where they have the potential to keep growing without being taxed until the money is withdrawn.
Tax-Deferred Compounding – Significant Long Term Growth
Potential With before tax saving, employee contributions can grow without being reduced by current taxes. With the added benefit of tax deferred compounding, earnings on all contributions are reinvested where they have the potential to keep growing without being taxed until the money is withdrawn.
A Broad Array of Investment Options
Most employers offer a broad and diverse menu of professionally managed investment options to help employees create their own personal investment strategy. Directing your 401k Plan Investments Detailed plan and account information combined with the flexibility to make changes are generally available 24 hours a day, 7 days a week online.