Whether retirement is a distant thought or an emerging reality, you can benefit from investing in your employer-sponsored 401(k) plan. All contributions are tax-deferred, and you pay taxes on contributions and earnings only when you withdraw money. A 401(k), especially if your employer offers matching contributions, can be a smart tool for planning your retirement. As always, consult a professional to discuss tax implications.
A 401(k) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 401(k) are tax-deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to your 401(k) account. The combined result is a retirement savings plan you cannot afford to pass up.