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by Roger Chartier www.HowCanIRetire.net - HomePage


Create a 401K Retirement Plan

If you create a 401K retirement plan when you are younger, it is more advantageous than later in life. The 401(k) plan contributor can withdraw funds after reaching 59½ years old.

The IRS came up with the idea and finally proposed the very regulations that started the 401k program on it's way on November10, 1981.

The idea to create a 401k retirement plan has not been the perfect solution because not enough people put enough money into it.

An article in the Wall Street Journal of Feb., 2011 says:
"The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement."

When you create a 401K retirement plan you add money and the dollars added are not taxed.

A traditional 401(k) account is funded with pre-tax dollars and, in general, tax must be paid when the original contribution and earnings are withdrawn.

The employer's matching funds are added pre-tax, as well.


Disclaimer: Before you make an investment get legal or professional advice.