Many people ask me about the value of participating in their 401k plan. Here are some of the basic reasons it is important:
- Our personal responsibility to our retirement income is growing every day. Gone are the days of everyone’s employer providing an income stream upon retirement. Our personal retirement savings has become an important factor in our future retirement comfort.
- Contributions to a 401k create a tax-advantaged account. Whether Roth or Traditional contributions (reference FAQ #4 for the difference), there is a tax qualification of the contribution creating a tax benefit for the money.
- 401k’s allow a greater annual dollar amount of tax-favorable contributions than IRA’s increasing tax favored monies.
- As a participant in an elective employer matching 401k plan, the employee can receive contributions to their account placed by their employer based on their own contributions.
As a Financial Advisor, please carefully consider your savings options. The advantages of 401k savings provide special opportunities for a better retirement.
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