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401K
Why 401(k) Plans?
A 401(k) plan may be a powerful tool in promoting financial security in retirement. 401(k) plans are a valuable option for businesses considering a retirement plan, providing benefits to employers and their employees. Employers start a 401(k) for a variety of reasons.
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A well-designed 401(k) plan may help to attract and keep high-quality employees.
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It allows participants to decide how much to contribute to their accounts on a pre-tax basis.
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Employers are entitled to a tax deduction for any contributions they make to their employees’ accounts.
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A 401(k) plan benefits a mix of rank-and-file employees and owner/managers.
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The money contributed may grow through investments in stocks, mutual funds, money market funds, savings accounts, as well as other investment avenues.
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Contributions and earnings generally are not taxed by the Federal government or by most State governments until they are distributed.
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A 401(k) plan may allow participants to take their benefits with them when they leave the company, easing administrative burdens.
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Additional Resources
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