401(k)s have become an extremely popular choice as a retirement account. Many companies offer them to their employees, and many of these companies also offer a match to contributions from the employees. These accounts can help you plan and prepare for retirement.

With the risks and concerns that companies have had with pensions, 401(k) accounts have become a popular alternative. These accounts allow companies to avoid the risk of underfunded pensions, by funding 401(k) accounts on behalf of it's employees. From an employee standpoint, these account generally allow contributions to the account pre-tax, so that you don't have to pay taxes on the money until you pull it out of the account.

On top of the tax benefits, many companies also offer matching of the employees contributions. In many cases this is at least half of the first 3% of the contributions, and sometimes even exceeds 100% of the employees first 5% contributed. For me, this is one of the most important factors for these accounts, you basically get free money from your employer by participating. Even if you can't contribute a lot, every little bit you can put in, at least up to your employers match, it free money for you.

In most cases these accounts also allow you to have some control over where your money is invested, most accounts provide at least a handful of mutual fund or similar accounts that you can select. This many require you to do a little research to feel comfortable with you selections, but it can be worth the effort. Most plans also have financial advisors available that you can turn to for help.

Retirement Topics