Last week we discussed why tax breaks are a great motivation to contribute to a 401(k). In this fourth and final week, we will discuss our last reason why you should contribute.
Reason number 4: Your money can go with you, job to job – If you change jobs, you can put your money into your new employer’s 401(k) plan, or roll the money into what is known as a Roth IRA. You have 60 days to rollover the money; after that time you have to pay taxes on that money and a 10% penalty if under the age of 59 1/2.
Being able to take the money you have already saved and put it into your new employer’s plan and continuing to allow it to grow is a great advantage of a 401(k) plan.
Now let’s summarize what we’ve discussed the past four weeks; A 401(k) plan is beneficial because your company can help your investments grow, automatic payroll deduction makes it easy to save, contributing to your plan can reduce your taxable income and your money can go with you job to job. Now that we have discussed these four reasons why to take advantage of a 401(k), we hope that you will consider saving the money now for later! Why would you not take advantage of this?
Have any thoughts or comments on this 4-week discussion of 401(k) plans? Post them below!