A 401(k) is one of the most valuable retirement planning opportunities for the majority of Americans. From the tax-deferred growth and up-front tax deduction to the benefits from automatic savings, the 401(k) plan is a critical component to a successful retirement. The future is up to you. Saving for retirement doesn't need to be complicated — it just needs to start now. Time is on your side. The sooner you start contributing to a 401(k), the longer your money has to grow.
Start Now. Complete your enrollment form, determine how much to save and select your investment options. Don't worry — these are all decisions you can change at any time.
Pay Yourself First
Out of sight, out of mind. Your contributions are taken directly out of your paycheck and deposited straight into your 401(k) plan.
Plan Contribution Limits
While the limits change almost yearly, for 2018 your maximum contribution is $18,500 for a 401(k). If you are 50 or over, your catch-up provision of $6,000 enables you to contribute a maximum of $24,500.
Your traditional 401(k) contributions reduce your taxable income. If you are in the 25% tax bracket and you contribute $100.00 to your plan, you have just saved $25.00 in taxes.
Since the money in your 401(k) plan grows tax-deferred, you do not pay taxes on the earnings in the account. In fact, you do not even report the income to the IRS until you take your money out. Always consult your tax and/or legal professional for details regarding your specific tax situation.
Your 401(k) Plan will provide you with investment choices. These will include cash equivalents, bonds, stocks or a mix. A 401(k) plan helps you create a diversified retirement investment portfolio and decide exactly how aggressive or conservative you wish to be.
Keep Your Hands Off Your Retirement Savings
Think hard before borrowing from your 401(k), even if it's to get rid of credit card debt. Essentially, you're robbing your retirement.
Think Long Term
As the years go by, life changes - so should your retirement savings strategy. Review your 401(k) plan annually and ensure it still meets your needs as retirement approaches.
Latest Updates & Information
The 2nd quarter continued to roll out strong economic results in the U.S. Some of this good data buoyed the market slightly in Q2.Read full story here
Check out the Second Quarter Market Insights led by Beth Spurry, CFP, CTFA.Watch video here
International Markets continue to be the most favored area of investment for the first quarter of 2018 and looking forward for the next 12 months. The best performing asset class in Q1 was emerging market.Read full story here