UNDERSTANDING AND CHOOSING A 401(K) PLAN
WHAT IS A 401(K)?
A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts
- Elective salary deferrals are excluded from the employee's taxable income (except for designated Roth deferrals)
- Employers can contribute to employee's accounts
- Distributions, including earnings, are includible in taxable income at retirement (except for qualified distributions of designated Roth accounts).
If your employer offers a 401(k) plan, the only choice you have to make is whether or not to enroll!
Contact one of the following advisers or one based at your employer for assistance:
CHOOSE A 401(K) PLAN
ADVANTAGES OF A 401(K)
401(k)s may offer huge tax advantages. Your contribution comes out of your paycheck before income tax deductions, lowering your tax bill.
401(k)s are a chance to get free money from your employer, through matching contributions.
A retirement plan shouldn't be the same generic savings plan used for day-to-day expenses. Investing in a mix of stocks and bonds creates a long-term personal plan for your savings.
Your 401(k) plan is flexible and your providers are there to offer help and guidance.