2007-02-11 14:18:13 · 6 answers · asked by denrus 2 in Business & Finance ➔ Investing
The 401K is one of the most used retirement accounts for US companies use in place of Pensions.
The catch here is that the employee puts the money into the account--BUT it still is one of the most important savings account an employee can use.
Most companies match your each 1 dollar with 50Cents of their own in your account.(you can't get that at any other account) the usually do that for the first 6% you put in.
This money goes into MONEY MARKETS -either Stock MM, BondMM or cash type.(short term )
There are usually several Money Markets to chose so you can really do a good job of diversifying your money.
Another real good part of this is since it is a retirement account you do not get taxed until you take it out so it accumulates faster and you subtract that yearly amount saved from your earnings from that year. (lower taxes for the current year)
It is really a great way to save money especially if you start young.
2007-02-11 18:24:14 · answer #1 · answered by Brick 5 · 0⤊ 0⤋
A 401K is a retirement plan. It is called that because that is what the legal name for it is. The principle of a 401K plan is that you contribute money from your salary and the company you work for will match it usually dollar for dollar. This means if you contribute 50 dollars a month, your company contributes 50 dollars per month. This is a good idea if you plan to live a good retirement worry free.
2007-02-11 22:23:26 · answer #2 · answered by AnswersGuru 3 · 1⤊ 0⤋
A 401k is a retirement plan. I belong to one with the company I'm with. After you are vested they will match up to a percentage. My company will only match up to 3%. I contribute 5%. My husband contributes 8%. It comes off the top of your paycheck. It is not part of your taxable income. When you withdraw it then it taxed. there are penalties for early withdrawal. You can also borrow against your 401k.. talk to the company your with. They should provide with all the answers to your company's particulars
2007-02-11 22:33:13 · answer #3 · answered by Just Me 2 · 0⤊ 0⤋
denrus we have the same in Canada, but i am from Quebec so
i don't know the name in english. it is your own pension fund
and your contribution are tax deductible.
2007-02-11 22:28:59 · answer #4 · answered by sammy 5 · 0⤊ 0⤋
he he he
2007-02-11 22:20:29 · answer #5 · answered by Fido 3 · 0⤊ 0⤋
you make money!!!!!
2007-02-11 22:20:22 · answer #6 · answered by vickielynnperry 2 · 0⤊ 0⤋