What are 401k Plans
A 401(k) plan is classified as a retirement savings plan that is offered by many American organizations to their employees. These plans contain tax advantages to the employees who sign up. If you are an employer considering offering 401(k) plans to employees, or you are considering changing your strategies, a professional can help you navigate the traditional and Roth options.
A traditional 401(k) is an employer-sponsored investment plan for employees. Those who sign up for a 401(k) contribute a small portion of their paycheck to the tax-deferred investment options.
The difference between a Roth 401(k) and a traditional 401(k) is tax implications. In a traditional 401(k) the contributions are pretax, which means the funds are deposited from your gross income, before your income is taxed. You will pay taxes when you withdraw from the account. With a Roth 401(k), the money is deposited into the account after taxes. This means that you paid taxes on these funds and, in most cases, will not have to pay taxes when you withdraw the funds.
Evaluating Your Company’s 401k Plans
401(k) plans are powerful tools when it comes to promoting the financial security of your staff There are tax benefits for companies offering employee retirement savings programs. If you are a business considering offering 401k plans, One Stop Financial Group can help you navigate your retirement program options and maximize retirement savings benefits for your employees.