Investing Basics: 401k / 403b Retirement Plan
If saving money is hard for you, and you’d rather adopt an “out of sight, out of mind” strategy, then make a decision to invest a certain percentage of your pre-tax dollars into your employer’s retirement plan option. Even if you start at 1% or 2%, something is better than nothing!
If your employer has a match, then it’s a no brainer. You should invest the same percentage of your income that your employer offers to match. This option doubles your money instantly!
Keep in mind that since you opted to enjoy tax-free contribution on the front end, your investments are subject to taxes and fees during the time of withdrawal. You’re also penalized heavily for early pre-retirement age withdrawals.
There are ways to “borrow” funds from your traditional retirement plans without incurring those hefty penalties, just make sure those funds are paid back on time!
Today's tip brought to you by Mvelopes and Money4Life Coaching.