Everyone knows what is a 401k all about. But, when it comes to benefits, few knows about it. The benefits of 401k investments plans will discuss in this page.
Are you an employee and wondering if you can retire young, happy and rich? Do you think 401k plans are the right investments for you? Do you know that 401k plans are one of the types of retirement plans?
Therefore, if you contribute to 401k plans, you are preparing for your financial future - for your retirement specifically.
What is a 401k?
It is a type of retirement savings plan sponsored by an employer. What do we mean by that? This plan is only good for employees who are willing to cut their paychecks before they will receive it.
Is it hard to invest in 401k plans? The answer is no! This is an automatic deduction from your salary. The good thing about it is, just contribute and after many working years, you'll never know you save enough money to retire.
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Similar to 401k Plans: These types of retirement plans can also help you invest money for your financial future;
- Individual Retirement Arrangements (IRAs)
- Roth IRAs
- 403(b) Plans
- SIMPLE IRA Plans (Savings Incentive Match Plans for Employees)
- SEP Plans (Simplified Employee Pension)
- SARSEP Plans (Salary Reduction Simplified Employee Pension)
- Payroll Deduction IRAs
- Profit-Sharing Plans
- Defined Benefit Plans
- Money Purchase Plans
- Employee Stock Ownership Plans (ESOPs)
- Governmental Plans
- 457 Plans
- 409A Nonqualified Deferred Compensation Plans
For more information about these types of retirement plans, read and study the guides at Internal Revenue Service
Are 401k plans Scam?
Obviously 401ok plans are not a scam! However, you should be aware that there are scam investment companies and they can offer you 401ks via online through email phishing or any type of internet mediums.
As a Summary
The benefits of 401k plans are easy investments plans that allows you to prepare your financial retirement savings. It is easy to invest because it is automatic compare to traditional investment.
In my next article, we will discuss about the best 401k plans. And we will answer the frequently asked question "is 401k the best investment options for my retirement". Always visit WhatIsA401k blog to read the latest updates. Share this with your friends and let me know your thoughts about this post. Thank you!