When you are young, everything is new and
exciting, including money. Whether you have just graduated from
college, or are fresh out of high school and entering into the
workforce, you need to have an idea of what to do with the
money that you are earning. Any wise person would advise that
you begin investing in a 401k retirement plan.
What is a 401k retirement plan?
retirement plan is a retirement savings plan set up by
your employer for your benefit. Starting off as soon as you can
is best and a 401k
retirement calculator will help you figure out how much
your savings will be available in your 401k retirement plan when you
Usually when you become an employee of a
company for a certain period of time, you will have the option
to enroll in the company's 401k retirement plan. The
company will then set up a 401k retirement account in your
What is a 401k retirement account?
A 401k retirement account is a saving
account held at the company you work for in your name for funds
to be used during retirement. Contributing to a 401k
account is a very popular way to invest for
retirement. Most people don't think far enough to plan for
their own retirement. They rely on the employer to set a
account up for them. See also Solo 401k.
Employers do not set up individual
Employers set up employer retirement plans
for employees as a group. Contributions to these employer
retirement plans are usually through payroll deduction. A
401k retirement plan is
an employer retirement plan, so is the famous 403b retirement
plan. An individual retirement account is set up by the
individual outside of the work place. Many people use an
retirement account as a supplement to their 401k retirement plan at work.
The contribution limits for a 401k retirement plan is much
higher than for an individual retirement account.