Like, Comment, and Share my videos! 🔔 SUBSCRIBE HERE 🔔 Become a channel member to get access to great perks: 🌟 🎓 👑 💯 LET’S CONNECT 💯 📷 Instagram @JakeBroe 👉 🐦 Twitter @Broe_Jake 👉 👇 👇 Watch My Other Videos Here 👇 👇 ★ Your 401K is a Waste of Time ★ How to Earn 20% a Year in Your Roth IRA ★ Backdoor Roth IRA - How Does It Work? ★ Have an Old 401k? Should You Rollover to an IRA? ================ What Is a 401(k) Plan? A 401(k) plan is a tax-advantaged, defined-contribution retirement account offered by many employers to their employees. It is named after a section of the U.S. Internal Revenue Code. Workers can make contributions to their 401(k) accounts through automatic payroll withholding, and their employers can match some or all of those contributions. The investment earnings in a traditional 401(k) plan are not taxed until the employee withdraws that money, typically after retirement. In a Roth 401(k) plan, withdrawals can be tax-free. How 401(k) Plans Work There are two basic types of 401(k) accounts: traditional 401(k)s and Roth 401(k)s, sometimes referred to as a "designated Roth account." The two are similar in many respects, but they are taxed in different ways. A worker can have either type of account or both types. Contributing to a 401(k) Plan A 401(k) is what's known as a defined-contribution plan. The employee and employer can make contributions to the account, up to the dollar limits set by the Internal Revenue Service (IRS). By contrast, traditional pensions [not to be confused with traditional 401(k)s] are referred to as defined-benefit plans—the employer is responsible for providing a specific amount of money to the employee upon retirement.3 In recent decades, 401(k) plans have become more plentiful, and traditional pensions increasingly rare, as employers have shifted the responsibility and risk of saving for retirement to their employees. Employees are also responsible for choosing the specific investments within their 401(k) accounts, from the selection their employer offers. Those offerings typically include an assortment of stock and bond mutual funds as well as target-date funds that hold a mixture of stocks and bonds appropriate in terms of risk for when that person expects to retire. They may also include guaranteed investment contracts (GICs) issued by insurance companies and sometimes the employer's own stock. Contribution Limits The maximum amount that an employee or employer can contribute to a 401(k) plan is adjusted periodically to account for inflation. As of 2020 and in 2021, the basic limits on employee contributions are $19,500 per year for workers under age 50 and $26,000 for those 50 and up (including the $6,500 catch-up contribution). If the employer also contributes—or if the employee elects to make additional, non-deductible after-tax contributions to their traditional 401(k) account (if allowed by their plan)—the total employee/employer contribution for workers under 50 for 2021 is capped at $58,000, or 100% of employee compensation, whichever is lower. For those 50 and over, again for 2021, the limit is $64,500. Employer Matching Employers who match their employee contributions use different formulas to calculate that match. A common example might be 50 cents or $1 for every dollar the employee contributes up to a certain percentage of salary. Financial advisors often recommend that employees try to contribute at least enough money to their 401(k) plans each to get the full employer match. ================ #401K #401KProblem #Retirement ================ DISCLAIMER: This video is for entertainment purposes only. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video. ADVERTISER DISCLOSURE: Jake is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to www.amazon.com. Additionally, other referral links are included and this channel does receive compensation for sending traffic to partner sites. Shopping through our links is an easy way to support the channel and we appreciate and are super grateful for your support!...(read more)
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INVESTING IN A GOLD IRA: Gold IRA Account
INVESTING IN A SILVER IRA: Silver IRA Account
REVEALED: Best Gold Backed IRA
The Biggest Lie About Traditional 401Ks and IRAs When it comes to retirement savings, traditional 401Ks and Individual Retirement Accounts (IRAs) are often touted as the golden standard. Financial experts and institutions promote them as the ideal way to build a nest egg for the future. However, behind this glossy facade lies a significant lie that many people fail to notice: the promised tax savings. The primary appeal of traditional 401Ks and IRAs is the promise of tax-deferred contributions. This means that the money you contribute to these retirement accounts is deducted from your income, reducing your current taxable income. Many individuals are enticed by the idea that they can lower their tax bills in the present, assuming it will lead to substantial savings in the long run. But here's the cold, hard truth: taxes never really disappear with traditional 401Ks and IRAs. They are merely deferred until retirement. When you start withdrawing money from your retirement accounts, you will have to pay taxes on both your contributions and the earnings accrued over the years. In fact, the entire amount withdrawn is treated as taxable income in retirement. This means that you may end up paying higher taxes in the future than you would have if you had saved your money elsewhere. The lie propagated by financial institutions is that you will be in a lower tax bracket during retirement. Many people believe they will have lower expenses and a reduced income once they retire, resulting in a lower tax liability. However, the reality can be quite different. Retirement can bring unexpected expenses, such as healthcare costs, home repairs, or even supporting grown children who face financial difficulties. Moreover, if you have a considerable amount of saved money, required minimum distributions (RMDs) imposed by the government can push you into a higher tax bracket. Considering these factors, traditional 401Ks and IRAs might not be the tax-efficient tools they are made out to be. This is not to say that these retirement accounts are entirely useless; they still offer valuable advantages such as employer matching contributions and tax-free growth during the accumulation phase. However, it is crucial to be aware of the truth behind the promised tax savings. So, what alternatives should individuals consider when planning for retirement? One option is the Roth 401K or Roth IRA. Unlike traditional accounts, Roth contributions are not tax-deductible. However, the withdrawals in retirement are entirely tax-free, including the earnings. By paying taxes upfront, individuals can avoid the potential tax burden during retirement and enjoy the benefits of tax-free growth. Additionally, individuals should explore other investment avenues, such as taxable brokerage accounts or real estate investments, that can provide more flexibility regarding tax implications. Diversifying one's retirement portfolio and considering different tax strategies can be key to mitigating future tax burdens. In conclusion, the biggest lie about traditional 401Ks and IRAs is the promise of significant tax savings. While they do offer certain advantages, the taxes are not eliminated but postponed, potentially resulting in higher tax liabilities during retirement. Individuals must be aware of this and consider alternative retirement savings options that better align with their financial goals and long-term tax strategies. https://inflationprotection.org/debunking-the-major-misconception-surrounding-traditional-401ks-and-iras/?feed_id=129620&_unique_id=64e350d6eaa16 #Inflation #Retirement #GoldIRA #Wealth #Investing #401k #401kbadinvestment #401kexplained #401kfordummies #401kplan #401kproblem #401kscam #401kvsira #401kwasteofmoney #financialeducation #how401kplanswork #howtherichavoidpayingtaxes #investing #IsA401kReallyAGoodRetirementPlan #neverinvestina401k #Retirement #retirementinvesting #ROTH401k #RothIRA #savingforretirement #stockmarket #stop401k #traditional401k #traditionalIRA #truthabout401k #whythe401kdoesntwork #TraditionalIRA #401k #401kbadinvestment #401kexplained #401kfordummies #401kplan #401kproblem #401kscam #401kvsira #401kwasteofmoney #financialeducation #how401kplanswork #howtherichavoidpayingtaxes #investing #IsA401kReallyAGoodRetirementPlan #neverinvestina401k #Retirement #retirementinvesting #ROTH401k #RothIRA #savingforretirement #stockmarket #stop401k #traditional401k #traditionalIRA #truthabout401k #whythe401kdoesntwork
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