ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Most employers match a portion of your contributions.
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You may withdraw funds at any time without penalty.
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You never pay taxes on your contributions.
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Your contributions are invested in high-return, high-risk fund
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Detailed explanation-1: -401(k)s offer workers a lot of benefits, including tax breaks, employer matches, high contribution limits, contribution potential at an older age, and shelter from creditors.
Detailed explanation-2: -One of the biggest advantages of investing in a 401(k) early is compound interest. Compound interest is when you earn interest on the principal amount of an investment plus any accumulated interest, i.e. it’s when you earn interest on interest.
Detailed explanation-3: -Matching employer contributions are one of the top benefits of employee 401(k) plans for employees. Employers have the option to match a percentage of employee contributions up to a set portion of total salary, or contribute up to a certain dollar amount, regardless of employee salary.
Detailed explanation-4: -An advantage of a 401(k) plan is that you get to use your contributions as a tax deduction. An advantage of the 401(k) is that your earnings get to grow without being taxed until you withdraw them.
Detailed explanation-5: -Having federal legal protection. Getting matching funds. Having a high annual contribution limit. Getting free investing advice. You may have limited investment options. You may have higher account fees. You must pay fees on early withdrawals. 23-Dec-2020