What will my 401k be worth calculator

It provides you with two important advantages. First, all contributions and earnings to your 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 You only pay taxes on contributions and earnings when the money is withdrawn.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 k account. The combined result is a retirement savings plan you cannot afford to pass up.

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Thank You. Your email address is now confirmed. You may even remember some of the rules regarding early withdrawals and roll-overs - or maybe not. In what cases is it most useful? Are there hidden costs? And, most importantly, how does the dang thing work?

Do you need help planning for your retirement? Find a financial advisor near you with our free online matching tool. A defined contribution plan is any retirement plan to which an employee or employer regularly contributes some amount. Often, the employee chooses to send a fixed percentage of monthly income to the account, and these contributions are automatically withdrawn, directly from her paycheck - no effort required.

In , when the law authorizing the creation of the k was passed, employers commonly attracted and retained talent by offering a secure retirement through a pension a type of a defined benefit plan. The k created an entirely new system, with more flexibility for both employer and employee. Matching is a very transparent process: for every dollar you put into your k , your employer also puts in a dollar, up to a certain amount or percentage of your income.

You are doubling your money, and your employer is building a happy workforce. Nothing to sneeze at. A k calculator can help you see how these matching contributions or larger yearly contributions can impact your retirement savings. Even for employers who do not offer any matching program, every employer with a k plan is responsible for administering the plan.

At the same time, employees who participate in a k maintain control over their money. While employers provide a list of possible investment choices, most commonly different sorts of mutual funds, employees have quite a bit of freedom to decide their own strategy. Ah yes. Perhaps the greatest advantage of the k is that contributions to a k savings account are made pre-tax. So for every dollar of pre-tax income, you can only drop 70 cents in your savings account.

Of course, keep in mind that income sent to your k is not tax exempt. Eventually, you will pay income taxes on it, but only when you withdraw it. That adds up. That leaves 27 years for your current investments to gain value. Even without matching, the k can still make financial sense because of its tax benefits. A k really only makes sense as a retirement savings plan, and not as a general savings account. Secondly, investments made through a k often carry risk.

As mentioned above, you will select from an array of investment choices with varying levels of risk, and with many of these, it is possible albeit unlikely that you may lose money over time. Keep that in mind when deciding how to allocate your retirement savings. It's important to also steer clear of k plans that charge high fees if you want to keep more of your money working for you.

In all, however, the k is a great option for you retirement savings. Given the tax advantages, the ease of use and the possibility of those additional matching funds, if your employer does offer a k , you should definitely consider taking advantage of it. Try putting your specific numbers into a k calculator to see how it could work for you.

Zoom between states and the national map to see data points for each region, or look specifically at one of four factors driving our analysis: unemployment rate, percentage of residents contributing to retirement accounts, cost of living and percentage of the population with health insurance.

Methodology Where are the places in the country with the best employee benefits? To answer that question we analyzed data on four factors: unemployment rate, percentage of residents contributing to employer retirement accounts, cost of living and percentage of the population with employer health insurance. First, we looked at the percentage of the county population that is unemployed.

We then indexed the ratio to , with a score of representing the county with the lowest unemployment. Enter Your Information Enter your current age. Work With a Pro. Find Out. Take Control. What if I Find a Pro Now.

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