My topic is why people should save for retirement with a 401(k) and/or other retirement plans. What is a 401(k), a 401(k) is a retirement savings plan for employees. The sooner you start the more you will have for when you retire. Many times when you put money in the account your employer will match a certain percent of the money, some employers will even match your investment. I believe everybody should be investing in a 401k or other retirement plan. In this paper I will attempt to make you see this topic the same way I do.
Investing in a 401(k) will save you money, let me tell you how. putting money in your 401 k plan allows you to lessen (or even avoid) the taxes you owe on the earnings that you put in your account. That's because your …show more content…
Say you contributed $5,000 a year to a 401(k) for 10 years and that your savings earned 8 percent a year and all invested earnings were restored in your account. Depending on how old you were when you made those contributions, you would see very different amounts at age 65 when you retire...
If you started saving at age 25, stopping at age 35, when you retire at 65 your account would be worth about $787,000.If you started saving at age 35, stopping at age 45, it would be worth about $364,000.If you started at age 45 and stopped at age 55, its value would be only about $170,000.And, if you waited to start saving until age 55 and contributed until age 65, you'd only have saved about $78,000.That is money you'll need to retire and without you'll be working until the day you die. With the evidence i have presented you with, it should be clear to you that you should invest in a 401(k) plan and/or an IRA. You will pay less tax when you take it out and you will pay no tax when you put money in the plan. Many employers will match a portion of your savings and you will earn interest on the money you have saved. In conclusion, 401(k)’s are a very smart investment. They save you money. They also make you money, you can get your investments matched by your employer, less taxes are applied to the money and it prepares you for
Investing in a 401(k) will save you money, let me tell you how. putting money in your 401 k plan allows you to lessen (or even avoid) the taxes you owe on the earnings that you put in your account. That's because your …show more content…
Say you contributed $5,000 a year to a 401(k) for 10 years and that your savings earned 8 percent a year and all invested earnings were restored in your account. Depending on how old you were when you made those contributions, you would see very different amounts at age 65 when you retire...
If you started saving at age 25, stopping at age 35, when you retire at 65 your account would be worth about $787,000.If you started saving at age 35, stopping at age 45, it would be worth about $364,000.If you started at age 45 and stopped at age 55, its value would be only about $170,000.And, if you waited to start saving until age 55 and contributed until age 65, you'd only have saved about $78,000.That is money you'll need to retire and without you'll be working until the day you die. With the evidence i have presented you with, it should be clear to you that you should invest in a 401(k) plan and/or an IRA. You will pay less tax when you take it out and you will pay no tax when you put money in the plan. Many employers will match a portion of your savings and you will earn interest on the money you have saved. In conclusion, 401(k)’s are a very smart investment. They save you money. They also make you money, you can get your investments matched by your employer, less taxes are applied to the money and it prepares you for