What is a 401k?
- A 401k is a retirement savings plan sponsored by an employer. It takes money taken out of your paycheck each period before your paycheck is taxed. The money in the 401k is not taxed until it is taken out.
How do I get one?
- You get a 401k if your employer sponsors them. You often have to spend 3 months to a year working for the employer before they allow you access to the 401k.
How does money get into it?
- The money comes from your paycheck before taxes each period. Money also comes from your employer if they offer a matching program.
Do I put money in it?
Yes, you put money in it from your paycheck before taxes. This can be set up automatically through direct deposit.
When do I see that money?
- Depends on which type of 401k account you’re in, but you typically do not look at your 401K until you plan to retire!
Can I have multiple?
- Yes you can have multiple 401k accounts or IRA accounts, but the maximum you’re allowed to contribute stays the same.