I need to know what 401k plan is all about.?

Question

If anyone could, please give me an ideal of what a 401k plan is. Thanks.

Answer 1

It is pure magic, that's what it is. A 401k is the single best way to secure your retirement and build wealth. The reason is simple. You are allowed to put aside up to 15% of your salary and not pay taxes on it. That means that you may be putting aside a big chunk of money, but it feels like less because it's untaxed. You can then invest the money you put aside as you desire and built interest on the pre-tax dollars. Not only that, but most employers will match contributions up to a certain amount.

Think about it like this, you get to invest money that you don't pay taxes on and you get free money from your firm. It's a win win.

Answer 2

A 401(k) is a plan typically sponsored by your employer allowing you, upon meeting eligibility requirements, to defer portions of your own compensation to the Plan. Depending on your Plan, it might Roth contributions (which are taxed currently) or ordinary (where you receive the tax benefit now).

Plans can have eligibility terms with as long as a year, 21 years of age and 1,000 hours of service. To know more, ask your employer for a "Summary Plan Description" which is a good place to get basic information.

Note - Although a participant is part of their employers 401(k) Plan, the employer does not guarantee payouts or returns. (However, they can be held liable for certain things).

Please let me know if you have addition questions!

Answer 3

I am not sure what 401 K stands for but it a retirement plan where you can invest in stocks and bonds. you can call some one in the stock market field like your Bank . I use Fidelity Investments