Knowlopedia
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The benefits of investing in a 401 (k) plan are many. First of all, the contributions to a 401 (k) plan are tax deductible and can therefore reduce your tax bill annually. In addition, the accumulated earnings on the account are not taxed until you begin making withdrawals. This means that you can take advantage of the growth of the market without paying tax on capital gains as long as your money remains invested.
In addition, some employers offer a match for every dollar that you contribute to your 401 (k) plan. For example, if your employer offers a match of 50%, this means that they will double every dollar you contribute up to the maximum amount allowed by law. This additional contribution can significantly increase the total amount accumulated over the years and provide an additional source of retirement income.
Finally, a 401 (k) plan is generally easy to set up and maintain because it is administered by the employer or a licensed broker who takes care of all the paperwork and administrative procedures associated with the plans of individual retirement, such as the IRA, traditional or Roth IRA.
In addition, some employers offer a match for every dollar that you contribute to your 401 (k) plan. For example, if your employer offers a match of 50%, this means that they will double every dollar you contribute up to the maximum amount allowed by law. This additional contribution can significantly increase the total amount accumulated over the years and provide an additional source of retirement income.
Finally, a 401 (k) plan is generally easy to set up and maintain because it is administered by the employer or a licensed broker who takes care of all the paperwork and administrative procedures associated with the plans of individual retirement, such as the IRA, traditional or Roth IRA.
