It’s wonderful when a person has a job that pays them well. However, creating true financial security requires that people look past the present moment and make plans for the future. Often times, the best way to create a better financial future is to save. While someone could just start putting money away in a bank savings account, there are significant benefits to choosing to put that money away in a 401K account. Read on to learn what some of those advantages are.
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* 401K in Yuba City CA
* is also a great investment because it helps employees reduce the amount of taxes they pay on payday. The earnings from the check that will go into the 401K account are taken before income taxes are figured into the equation. Because employees are taking home less, they are also paying less to the government. They can defer the taxes on those earnings until later in life when their tax rate is often lower due to a decline in their income.
* One of the best things about investing in a 401K in Yuba City CA is that many employers will give employees a hand up by matching their contributions up to a certain amount. In some cases, employers may match up to fifty percent of the first five to ten percent of savings. For many employees, this is like having free money deposited into their account, something that banks will likely not do for the owner of a savings account.
* The money that an employee puts into a 401K account is accessible to them in the form of loans. For some very specific reasons (such as making a major life purchase or sending a child to college), 401K plans will allow the employee to borrow from their account. While the loan has to be repaid in a short period of time (usually about five years), the employee usually won’t have to worry about any liability where taxes are concerned.
Tomorrow’s financial security is entirely dependent on what a person does with their money today. Although bank savings accounts have their place, having a 401K has the potential to provide families with serious advantages that banks simply cannot. Get in touch with an experienced wealth management specialist to find out more about how setting up a 401K now and contributing to it regularly can help a person gain more peace of mind about their future.
