What is a 401(k)?

The 401(k) plan is a type of employer-sponsored retirement plan under section 401(k) of the Internal Revenue Code. A 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal.

Why Do I Need One?

Did you know that the Social Security Administration’s most recent trustee report states that Social Security will begin to run a negative cash flow by the year 2017 and by the year 2040 will not be able to pay full benefits?

With the impending Social Security crisis and dramatic reduction in pensions, it is imperative to begin planning for your financial future today, and the 401(k) can help.

401(k) Advantages You NEED to Know to Create Future Wealth and Save for Retirement

Social Security might not be enough to secure your financial future. That’s why the government created the 401(k)—to help you save for your future. A 401(k) investment grows in a tax-free and tax-deferred environment that compounds over time—maximizing the ability to grow wealth. The main advantages are:

• Compound interest in a tax-deferred environment
• Potential Tax-free distributions
• Large tax deductions (possibly more than $50,000)
• Assets protected from creditors

To learn more, see:

• Equity Trust small business solutions