October 31, 2014
One of the best things you can do for your future is invest. If your company offers a 401(k) hopefully you’re already taking advantage of it. If you’re not, you should be.
A 401(k) is a tax-advantaged retirement savings account sponsored by your employer. Typically an employer will match an employee’s contributions, though they do not have to. The money grows tax free while in the 401(k) as taxes are only paid when distributions are taken. By age 70 ½ distributions become mandatory and you must pay income tax on each withdrawal.
The big news this year concerning 401(k)s actually impacts next year. For 2015, contribution limits are increasing . While this year employees under the age of 50 could contribute up to $17,500, next year they can contribute up to $18,000.
If you’re not investing through your company, now is a great time to start! You should at least be saving enough to be eligible for your company’s match, if they offer one. For more information regarding 401(k)s, visit www.401khelpcenter.com.