Since there have been a lot of 401(K) propaganda floating around the internet of late. I decided to create a thread 🧵 with the benefits
1. Tax-Deferred Earnings:
When you contribute a percentage of your pay to a 401(k) plan, you immediately start paying less to Uncle Sam. That's because your contribution comes out of your paycheck before income taxes are deducted. That means your taxable income is less.
When you contribute a percentage of your pay to a 401(k) plan, you immediately start paying less to Uncle Sam. That's because your contribution comes out of your paycheck before income taxes are deducted. That means your taxable income is less.
2. Matching Contributions:
Many employers will match a portion of your savings. It's like passing up free money if you don't participate.
Many employers will match a portion of your savings. It's like passing up free money if you don't participate.
3. Control:
You can contribute as much or as little as you want to your account (subject to plan and IRS limits). Plus, you have the flexibility to change your contribution levels at any time (subject to plan limits) dependent on your situation.
You can contribute as much or as little as you want to your account (subject to plan and IRS limits). Plus, you have the flexibility to change your contribution levels at any time (subject to plan limits) dependent on your situation.
4. Allocation:
You can control allocation in ETFs with most. Last year, I restructured mine to cut all bond holdings and increased exposure in Large Cap ETFs. This allowed me to have a positive year in 2022. There are plenty of ETFs to choice from & savings/cash is a choice too
You can control allocation in ETFs with most. Last year, I restructured mine to cut all bond holdings and increased exposure in Large Cap ETFs. This allowed me to have a positive year in 2022. There are plenty of ETFs to choice from & savings/cash is a choice too
5. It is not Job Dependent:
Even if you change jobs, the money you’ve contributed to your 401(k) and its earnings belong to you. Depending on your plan type, there are different ways to keep your retirement plan invested and growing on a tax-deferred basis.
Even if you change jobs, the money you’ve contributed to your 401(k) and its earnings belong to you. Depending on your plan type, there are different ways to keep your retirement plan invested and growing on a tax-deferred basis.
6. Assistance:
Most 401(K) plans offer free financial planning assistance and risk assessments for your holdings. If you don’t know what ETFs to choice, there is a team of professionals to help!!
Most 401(K) plans offer free financial planning assistance and risk assessments for your holdings. If you don’t know what ETFs to choice, there is a team of professionals to help!!
There are a ton of options with 401(K)s Myself & my wife allocate the max amount possible into ours. A 401K should be 99% of peoples main stock/bond investments. Taxable accounts should be used for experienced traders, not retail investors. Don’t let ego cloud judgement!!
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