What is a good reason to contribute to a 401(k) retirement account?

Business

1 answer:

kykrilka [37]3 years ago

4 0

Answer:

The money in the 401(k) account is not taxed until withdrawn.

Explanation:

A 401 (k) can be defined as a type of compensation (savings) plan that is being sponsored by a business firm or company (employer) to avail its employees the opportunity to contribute into. As a company-sponsored and defined-contribution retirement savings plan, it offers tax advantages to the employees because it reduces their income tax for the particular year while taxing their withdrawals.

A good reason to contribute to a 401 (k) retirement account is that, the money in the 401 (k) account is not taxed until withdrawn. Thus, the money contributed by an employee to a 401 (k) will maintain its tax-deferred status until he or she withdraws it.

For example, a 401 (k) would be the best retirement savings option for a 50-year old medical doctor whose employer offers a 5% contribution match.

You might be interested in

Form a correct sentence by unscrambling the following sentence en el espanol hay vocales cinco

-Dominant- [34]

Answer:

En el español hay cinco vocales.

Explanation:

6 0

3 years ago

The price of good B has a pattern such that P = $20 on Monday through Thursday of every week, and P = $25 on Fridays. If specula

Andru [333]

Answer:

The correct answer is D. increase; decrease.

Explanation:

Speculation consists of the purchase (or sale) of goods with a view to their subsequent resale (repurchase), when the reason for such action is the expectation of a change in the prices affected with respect to the dominant price and not the gain derived from its use, or of some kind of transformation carried out on these or of the transfer between different markets.

A speculative operation seeks not to enjoy the good or service involved, but to obtain a benefit from the price fluctuation based on the theory of arbitration. In an extensive sense, every form of investment that a medium entails is speculative; However, the term is usually applied to that investment that does not entail any kind of commitment to the management of the assets in which it is invested, and is limited to the movement of capital (financial market), usually in the short or medium term.

The speculation is based on the forecast and the perception, so that the speculator can also be wrong if he does not correctly anticipate the evolution of future prices, so he will have to sell cheap something he bought expensive. The speculative market therefore rewards those who know how to predict.

3 0

3 years ago

At your next meeting with the senior management team, you suggest this, and you're met with a lot of blank looks. The managers d

Nostrana [21]

Answer and explanation:

Under such a scenario, it is important to highlight that the SWOT analysis is useful to spot the internal Strengths and Weaknesses of the firm as well as the external Opportunities and Threats of the market. The SWOT analysis is a helpful tool that allows companies to understand what their core competencies are as well as the components that need improvement. At the same time, the SWOT analysis gives the firm an idea of what are the sectors of the market that could bring potential profits for the entity and which ones represent potential losses.

7 0

3 years ago

Harry wants to save money in a bank account. He decides to open a _______ account with a five-year maturity date because it offe

MrMuchimi

Money Market, a higher interest rate

4 0

3 years ago

Read 2 more answers

The primary goal of the federal reserve system is to/12562961/289d096f?utm_source=registration

Finger [1]

The Federal Reserve System often referred to as the Federal Reserve or simply the Fed is the central bank of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system.

3 0

3 years ago