Faith And Finances

401(k)s Explained

Informações:

Sinopsis

401(k)s are not perfect, but they do provide a way for workers to begin their investing journey toward retirement. They can be complex and many books have been written about 401(k)s. In today's episode, we are going to simplify it for you.   In This Episode, We Look At: What, exactly, is a 401(k)? It is an employer-sponsored retirement plan and by "employer-sponsored" we do not mean that it is completely funded by the employer. This is a program through you can contribute a set portion of your earned income into investments, automatically, which means you do not have to rely on your memory to contribute. In traditional 401(k) plans, your financial contributions come out of your paycheck without being taxed, so every dollar contributed is credited to your investment account. These "pre-tax" contributions actual allow for more of your money to be invested without hurting your budget. For example, when you earn $100 you do not take home $100. Because of taxes, you take home something closer to $70