1. 401K Retirement Savings Acount BY: DREW HONDA Period 7

2. What is a 401Retirement Savings Account? : A 401k is a company/employer sponsored retirement plan that allows workers to take out a portion of money from their daily paychecks, store it on a retirement plan account and earn interest tax-deferred. Tax-deferred: The money you have saved is not taxable until you withdraw it 65 years or older.

3. Knowing Your Penalties: 401ks are designed to help you save for retirement, there are penalties for taking your money out early. You’ll owe income taxes on the total amount and, if you're younger than 59½, also may owe a 10% early-withdrawal penalty. The IRS requires your employer to withhold 20% of your account value to pre-pay at least part of the taxes you’ll owe.

4. TIPS: Make good choices. Its you who chooses how much money you will invest in it. Talk to a professional for the best investment strategy to help you reach your retirement goals.

5. 7 Ways To Mess Up: 1)NOT signing up! 2)Missing out on the full company match. 3)Taking too little risk. 4)Taking too much risk. 5)Drinking the company “Kool Aid”. 6)Taking out loans. 7)Cashing out.

6. BENEFITS: An employee's taxable salary is reduced. All investments in a 401k account grow tax-free until they are withdrawn at retirement. The employee can re-direct funds among various investment vehicles. Employer contribution matching can help for retirement savings. A 401k plan can be rolled over into another eligible plan should the employee leave the company. f an individual files for bankruptcy, the assets in a 401k account are completely protected.

7. Bibliography: 1.http://www.401kplanning.org/top-401k-planning-questions- and-answers/what-is-a-401k-plan/what-are-average- retirement-savings-for-different-age-groups/ 2.http://articles.moneycentral.msn.com/RetirementandWills/I nvestForRetirement/7MostCommon401kBlunders.aspx