what the pro and con of a 401k program?

Answer 1

The pros are: you save money. The money and savings are tax deferred, so you don't have to pay taxes until you withdraw the money.
The cons: Your money gets tied up and you cannot use it until you turn age 59 1/2. If you withdraw earlier, you have to pay taxes and a 10% penalty on the gross amount withdrawn.

Answer 2

The big pro of 401Ks is they are automatic savings, so you do not have the temptation to spend the money which you never see. The other pro is the money grows without having taxes taken out until you withdraw the money.

There is absolutely no con to contributing to a 401K the amount needed to get the company match.

The con is the lack of flexibility with the money. Most 401Ks allow you to invest in at least some decent mutual funds. But the big lack of flexibility is if you need the money before you turn 59 1/2. You will generally have to pay a 10% penalty on top of the taxes.

After getting the company match, I would reccomend openning a ROTH IRA. These are a little more flexible(you can withdraw contributions), but take more discipline. If after the ROTH IRA max, you still have money to contribute to retirement, then I would bump up the 401K contribution.

Answer 3

its a great program,but i wouldn't say no cons, you cant take it out without penalty until 59 1/2, though that can actually be a pro if you are a spender, it forces you to save

tax savings now, tax deffered growth, easy to save by taking it right out of your check, and usually a company match on the money you invest, if you can use a 401k then do it

Answer 4

No Cons all pro, you dont have to pay money on the money you save, putting you into a lower tax bracket

great stuff, max it out if you can, you will see that it is cheaper then you thought, best way to become a millionair