401 K Savings Account Louis Hillen Period 6

What’s a 401 K? Retirement Savings Account Funded by employee contributions Matching contributions from the employer; Contributions are made from your salary before taxes Funds grow tax-free until they are withdrawn

More Employees take a portion of their before- tax-salaries into employer-sponsored retirement saving plan

Requirements For example, investing $300 per month for 30 years with a 6-percent compounded annual return would result in an account balance of $301,355. However, a 1-year minimum service requirement would reduce the number of years to 29 and the final account balance to $280,362.

TIPS Let the money sit unless you really need it. In a 401k plan, you accrue better-than- average interest and enjoy tax-free gains on your capital.

Tips Avoid getting paid out of your 401k unless you have a genuine need for the money. The penalties and taxes in place are designed to act as a deterrent.