| Most of us will live through to retirement and when | | | | retirement income is so much greater, than if you |
| we do we will need an income to continue living. The | | | | paid tax before you invested into the 401(k). When |
| government does have a limited safety net for you | | | | you negotiate your terms and conditions of |
| in social security but you do not want to live in | | | | employment you should also seek to have the |
| retirement on this meager amount of income. Whilst | | | | employer contribute to your 401(k) retirement fund |
| you have the capacity to earn, you need to invest | | | | which again is advantageous to you and also to them |
| into your retirement, a tax effective way to do that | | | | as they can claim this as an expenses of business. |
| is by the 401(k). Like any investment you could reap | | | | With some 401(k) plans you can withdraw funds prior |
| substantial rewards or suffer some significant losses. | | | | to retirement, you need to check whether you |
| It is extremely important to pay attention to the | | | | 401(k) will allow you to do this. Usually you will have |
| 401(k) investments you have and take appropriate | | | | to pay tax on any early withdrawals. You have the |
| action of moving them when it looks like you could | | | | ability to choose your investments with your 401(k). |
| see some losses coming. | | | | Broadly these investment choices fall under these |
| Most people know what a 401(k) is but if you don't | | | | high level categories of fixed funds, mutual funds and |
| know what it is, it is basically giving your employer | | | | company stocks. You should be aware that |
| permission to invest some of your paycheck into a | | | | sometimes your employer can decide that your |
| retirement fund before tax is taken out. The two | | | | 401(k) will be invested in different choices that you |
| benefits here is the investment you are making with | | | | have selected. This usually happens when the |
| your future and that you are doing this with a tax | | | | employer changes the investment company, through |
| advantage that makes it even more attractive. The | | | | a process called re-enrollment. You do have some |
| tax advantage here is that your investment is larger | | | | safeguards here where in general you are entitled to |
| and that has a snow ball effect on accumulating | | | | receive 30 days notice before the change takes |
| more retirement funds. When it comes time to pay | | | | effect. |
| the tax at the withdraw time of retirement, you | | | | |