Individual Retirement Accounts

401k Retirement

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?

A 401k 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 retire.

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 name.

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 retirement 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 retirement account up for them. See also Solo 401k.

Employers do not set up individual retirement account

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 individual 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.