Most financial experts agree that there is a three pronged approach to saving for retirement. The first is government benefits, the second is employee-based pension funds, and the third is personal savings. Unfortunately, there are many financial experts that insist that government benefits, such as Social Security, may not be around very long. People looking to retire in 20 to 30 years, or even perhaps sooner, may not be able to enjoy that particular benefit. This puts the onus on employer-based pension funds, if they are available, and personal savings. As it relates to employer-based funds, these are typically entailed in a 401(k) pension plan.
The fact is that a 401K in Marysville CA is something that every person who has one available to them should take advantage of. One of the reasons is not only excellent returns but the amount of money that can be put away into these plans. Most employers offer a 50% matching funds agreement, up to a certain percentage of money saved from a person’s paycheck. Typically, the matching fund is typically about 6% of a persons saved income going towards a 401(k). What this boils down to is a person is receiving a 50% return on the money that they save with matching funds from an employer. The fact is that this sort of return is virtually unheard of in any other type of investment, and not taking advantage of it is simply walking away from free money.
Another very practical and immediate benefit of a 401K in Marysville CA is the tax deferment. Since the money contributed to these pension funds come directly out of a person’s paycheck, they are automatically going to be paying less taxes. In addition, come income tax filing time, their taxable income is going to be significantly less should they contribute more sizable portions of their pay towards a pension fund.
The truth is this barely scratches the surface of the benefits that come from an employer-provided 401(k) program. From tremendous wealth growth, far better than average returns through employer matching contributions and its immediate as well as its future tax implications, these programs should be a serious consideration when a person is looking to save for their retirement. To find out more about the benefits of these programs, you may want to browse our website for more information.
