#schoolofpersonalfinance #401k #roth401k #personalfinance #moneybasics #financialfreedom
A 401k plan is an employer-sponsored retirement plan. Odds are if you work at a for-profit company you will have a 401k plan made available for you to participate so you can save for retirement. Each 401k plan has its own set of rules. For example, some plans may require you to wait three months before contributing, some plans will offer a great match, some plans offer a Roth option and some plans might even enroll you automatically when you start working.
401k’s are voluntary accounts, meaning you only participate if you want. You can also start and stop contributions at any time. The big benefits of the 401k plan are the tax benefits, the employer match and the convenience of payroll-deducted forced savings. The major drawbacks of the 401k plan are the access to your money and depending on your plan, the fees and investment options available inside of the plan. You need to be very aware of the fees charged in your specific plan. Watch the video above for more information about 401k plans.
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