The Benefits Of Contributing To A 401(k)

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Regardless of the point you're at in your career, we're sure you've been told how important it is to contribute to your employer's 401(k) plan if one is available to you. But the question here is, why? What makes a 401(k) plan so valuable, and why should you be tucking away as much as you can in one? As your trusted financial planner, we're here to provide the answer; take a look below to learn three of the benefits of participating in a 401(k):

1. By contributing a portion of your paycheck to a retirement plan, you'll start to see a reduction (even if very small) in how much you pay in taxes. How so? The reason for this is that your contribution is deducted from your total earnings before taxes are applied, making your taxable income less in the long run.
2. Depending on your employer's policy, you may be eligible to receive what is essentially free money from them. If they offer an employer match, they'll also contribute to your 401(k) plan - that's additional savings you wouldn't have otherwise!
3. If absolutely necessary (such as to cover medical expenses or to buy a home), you may be able to borrow from your 401(k) savings. Although you will have to pay back this loan eventually, it can certainly help set your mind at ease knowing that you do have extra money available to you in times of need.

Considering that the success of your retirement relies heavily on how much you save when you are still employed, it's essential that you start contributing to a 401(k) or other type of savings plan as soon as possible! But since doing so can be tricky (for example, which investments should you choose?), we want to help you out!

To learn more about the retirement planning services we offer here at American Investment Planners LLC, please give us a call at (516) 932-5130 or visit us on our website today.