The Future


What makes 401(k)s great?

401(k)s are great because they compound investment returns over time and have the ability to grow tax-free over the long term. You don’t have to pay current taxes on the amount of income earned from these investments as you contribute into your 401(k), so it shields your income from taxes. Since you will most likely make more money now (and pay more in taxes now) than when you retire when you begin to withdraw from your 401(k), it will be taxed at the rate of your income bracket when you are earning much less, thus allowing you to pay less taxes on that money in the future than you would pay on it today. You receive retirement savings, company matches, tax deferrals, and tax-free earnings, just by deducting a small percentage of your income each year.


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