Question
Why contribute to 401k?
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29th Oct 2009 by Joseph Pousada
You would contribute to your 401k as part of your retirement planning strategy. The amount you contribute would be deductible from your taxes in the year the contribution was made. The assumed benefit here would be that during retirement you would be in a lower tax bracket when you are taxed on your distributions from these funds. In addition, the investment can grow tax deferred, which means that they grow and work for you before you pay taxes. Another reason to consider when reviewing your retirement investment strategy with your financial advisor is whether your 401k plan will match your contributions with employer contributions. You would also want to review with your advisor the investing options as well as the vesting stipulations of your plan to come up with a comprehensive strategy to your retirement portfolio.
You would contribute to your 401k as part of your retirement planning strategy. The amount you contribute would be deductible from your taxes in the year the contribution was made. The assumed benefit here would be that during retirement you would be in a lower tax bracket when you are taxed on your distributions from these funds. In addition, the investment can grow tax deferred, which means that they grow and work for you before you pay taxes. Another reason to consider when reviewing your retirement investment strategy with your financial advisor is whether your 401k plan will match your contributions with employer contributions. You would also want to review with your advisor the investing options as well as the vesting stipulations of your plan to come up with a comprehensive strategy to your retirement portfolio.
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20th Oct 2009 In Retirement
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Subjects: 401k,