What Is 401k Plan And How Does It Work
Introduction to 401(k) Plan
A 401(k) plan is a retirement savings plan offered by employers to help employees save for their future. It provides tax advantages and employer matching contributions.
How Does a 401(k) Work?
401k Plan
Employees contribute a portion of their salary to the plan, which is often matched by the employer. Funds grow tax-deferred, and withdrawals are made in retirement. Now you understood What Is 401k Plan And How Does It Work.
Benefits of a 401(k) Plan
Tax advantages (pre-tax contributions,
tax-deferred growth)
Benefits
Employer matching contributions
Automatic savings for retirement
Investment options for growth
Contribution Limits & Withdrawals of
401k Plan
The IRS sets annual contribution limits 01 Early withdrawals before age 59½ may incur penalties
03
02 Required minimum distributions (RMDs) start at age 73
Next Steps
401 k Plan
A 401(k) is a powerful tool for retirement savings. Maximize your contributions, take advantage of employer matching, and plan for a secure future.
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