I, for one will not be eating dog food when I am 70!
Posted 03-11-2007 at 07:30 AM by mycoupons
401 what? Is that a new cereal?
No, it's not cereal. It's your ticket to a happy retirement.
If you do not know what a 401(K) is- listen up!
401 (K) is a retirement plan that allows you to save and invest for your golden years. The federal government established the 401(k) in 1981 with special tax advantages, to encourage people to prepare for retirement.
401 (K) is named for the section of the Internal Revenue Code which established them.
Through a 401(k), you have your employer deduct a certain amount of money from your paycheck before taxes. This means you are basically only spending .70 for every dollar you invest.
96% of employers also offer a matching program. This is FREE MONEY. Basically, they will match your investment. Some employers will match 100%, some 50%.
My husband's employer for example, matches 100%- up to 5% of his paycheck.So we invest 5%, and his company invests 5%. For you math majors out there- that is 10% of his salary being put away for retirement.
Your money will be invested in options that you choose from the ones offered through your company's plan. From the stock market to company stock.
Many people say they can't afford to invest. I say you can't afford NOT to! You say your paychecks are already barely enough- once taxes and health insurance premiums are deducted. But, remember this money is TAX free. So, let's say you make $30,000 a year, and invest $2,000 into your 401 (K), come tax time, your taxable income will only be $28,000.Look at it this way, $1.25 a day stashed in your pillow case for 30 years will add up to $13,600. But if you took that $1.25 a day and invested it in your 401 (K) (assuming you earned a 7% return) in 30 years, you would have $46,000!Of course, 401 (k) plans are investments, and there are risks involved with investments. So, make sure you speak to your financial planner about the right investments for you. I found this awesome calculator. You input some basic information from your pay stub, and it will calculate how much your paycheck will change depending on your investment. It will also calculate your potential for your account to grow in the future. CalculatorI am NOT a financial advisor (or a doctor, like my friend, Sara) but, I am pretty smart when it comes to money. Take it from me; you can't afford NOT to invest in your plan. The number one mistake you can make with a 401(K) plan is NOT investing in one. Not many times in life does the chance at free money come at you. Take it!Until we meet again,
Cici
Cici@MyCoupons.com P.S. Sorry for the format of the paragraphs, my software is acting up, AGAIN. And my tech guy won't be back till Monday.
No, it's not cereal. It's your ticket to a happy retirement.
If you do not know what a 401(K) is- listen up!
401 (K) is a retirement plan that allows you to save and invest for your golden years. The federal government established the 401(k) in 1981 with special tax advantages, to encourage people to prepare for retirement.
401 (K) is named for the section of the Internal Revenue Code which established them.
Through a 401(k), you have your employer deduct a certain amount of money from your paycheck before taxes. This means you are basically only spending .70 for every dollar you invest.
96% of employers also offer a matching program. This is FREE MONEY. Basically, they will match your investment. Some employers will match 100%, some 50%.
My husband's employer for example, matches 100%- up to 5% of his paycheck.So we invest 5%, and his company invests 5%. For you math majors out there- that is 10% of his salary being put away for retirement.
Your money will be invested in options that you choose from the ones offered through your company's plan. From the stock market to company stock.
Many people say they can't afford to invest. I say you can't afford NOT to! You say your paychecks are already barely enough- once taxes and health insurance premiums are deducted. But, remember this money is TAX free. So, let's say you make $30,000 a year, and invest $2,000 into your 401 (K), come tax time, your taxable income will only be $28,000.Look at it this way, $1.25 a day stashed in your pillow case for 30 years will add up to $13,600. But if you took that $1.25 a day and invested it in your 401 (K) (assuming you earned a 7% return) in 30 years, you would have $46,000!Of course, 401 (k) plans are investments, and there are risks involved with investments. So, make sure you speak to your financial planner about the right investments for you. I found this awesome calculator. You input some basic information from your pay stub, and it will calculate how much your paycheck will change depending on your investment. It will also calculate your potential for your account to grow in the future. CalculatorI am NOT a financial advisor (or a doctor, like my friend, Sara) but, I am pretty smart when it comes to money. Take it from me; you can't afford NOT to invest in your plan. The number one mistake you can make with a 401(K) plan is NOT investing in one. Not many times in life does the chance at free money come at you. Take it!Until we meet again,
Cici
Cici@MyCoupons.com P.S. Sorry for the format of the paragraphs, my software is acting up, AGAIN. And my tech guy won't be back till Monday.
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