Many people are not taking advantage of FREE money with 401K investing. I don't know why anyone in their right mind would turn down free money?! But it happens more often than not.
At my husband's employer, they match half of an employee's contributions up to 6% of salary. That means you put away 6%, but get 9% in savings.
Even better, you get to put the money away before taxes. So in the end you could earn something like $1.70 for every $1 reduction in your paycheck. That's simply phenomenal.
Also, when you start earlier, you get the benefit of compounding growth.
Let's say two investors each deposit $2,000 into an account earning and reinvesting 10% dividends...
Investor A starts at age 26 and makes a $2,000 deposit each year until he retires at 65. Investor B makes his first deposit at age 19, then adds $2,000 for only the next six years.
For simplicity, imagine their stock portfolios show no share-price appreciation. They just crank out 10% dividends each year. On their 65th birthdays, the two investors compare the balances in their accounts.
Even though Investor B only made seven contributions, he made more money than Investor A, who made 40 contributions. The trick is, Investor B started seven years earlier. So on the day Investor A made his first contribution, Investor B had already accumulated more than $20,000, and his portfolio was earning more than $2,000 a year in dividends.
幸运飞艇精准计划正规团队The earlier, the better. For folks looking to help your grandchildren out with college, invest a few thousand dollars when they're born, let it compound for 20 years, and you'll be the world's best grandparents come college time.
幸运飞艇精准计划正规团队A 401(k) is a retirement savings plan sponsored by an employer. It lets you save and invest a piece of your paycheck before taxes are taken out.
幸运飞艇精准计划正规团队There are 2 types of 401K investing accounts. The main difference is how it is taxed.
A traditional 401K is savings before taxes - so it helps to lower your taxable income. A Roth 401K is savings after already paying taxes.
So when you start withdrawing funds from a traditional 401K account, you will need to pay taxes. For a Roth 401K account, there is no taxes owed.
There are also differences in how you can access the funds. Here is a breakdown of each:
Most companies allow you to enroll in a 401(k) right away, although some smaller employers might make you wait up to a year.
If that’s the case, set up an individual retirement account, and lodge a complaint with your employer’s HR office. Some companies will automatically register you.
You can normally increase or decrease your contributions at any time.
Don’t forget to elect a beneficiary, or the person who gets your money if you die. (If you’re married, your spouse is automatically the beneficiary.)
Finally, if your company is on shaky ground, don’t worry. Your 401(k) is off-limits. If your company goes under, the plan would most likely be terminated.
If that happens, you should roll the money over into a traditional IRA to avoid paying the 10% withdrawal penalty and income taxes.
So get started investing in your 401(K) account Today!
I can't stress enough how important it is to start a 401K investing account sooner than later. And if you set it up as an automatic payment, you won't even miss the money!
幸运飞艇精准计划正规团队Plus, you can contribute more than 6%. My husband and I have been contributing 10-15% for years! You'll be amazed at how quickly it grows...automatically!
Sign up for a low cost account
The best types of investments over the long term is stock funds (ETF) that have a long history of paying dividends. What I like to call "Dividend Kings & Queens"!
Here are 2 Dividend ETF funds that I own:
iShares Select Dividend ETF Nasdaq Stock Symbol: DVY
PowerShares High Yield Equity Dividend Achievers Portfolio Fund Nasdaq Stock Symbol: PEY
Funds like these will grow your income safely and automatically over the long term.
Happy 401K investing!
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