What is the value of having a 401k?

Question

technical language okay

Answer 1

You are saving money pre-tax, which of course, reduces the amount of taxes you pay (you will have to pay them when you withdraw though). The money is taken out of your paycheck before your taxes are calculated. So you are netting about 10 - 35% right there. In addition, as others have said, you normally get some type of company match. The company I work for matches 75% of the first 6% of your pay you contribute. FREE MONEY. However, this "matching" amount usually vests over 5 years. So to get 100% of that matching money, you usually need to work for the company for 5 years. (20% after 1 year, 40% after 2 years, 60% after 3...). If and when you leave the company, roll the money over into a mutual fund company (I like Vanguard). DO NOT get a check issued to you -- have the company make it out to the mutual fund company, otherwise it will be considered an early distribution and you will have to pay a penalty and taxes on the amount. Never touch this money until retirement. Bottom line, it's a great way to save for retirement.

Answer 2

Well suposedly if you get a job that has one, if you leave that job, you can have that 401K always go with you... so you'll always have $$$ saved away (it's originally investing in the company that you work or worked for, I'm pritty sure that's what it is... their stock).
Well that's all I know, it's not like I have one LOL, my BF almost got a job that had one, but like I said, almost...

Answer 3

Well, you put money in and over time that money will compound and earn more money. If you are vested your company will usually match your deposit every paycheck. Add all that to a stock that's doing well or a well-balanced portfolio and over a little time you'll have a nice nest egg!

Answer 4

Good retirement plan. Usually your employer will match the amount you contribute.

Answer 5

I caught that Joke !

lol , good job that's pretty funny !

Answer 6

401000.