ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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401(k)
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Single stocks
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Roth IRA
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Bond funds
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Detailed explanation-1: -Why Do Employers Have Vesting Policies? Employers use vesting policies to encourage the longevity of their employees. Many employees will stay in their jobs until they’re fully vested in their 401(k)s in order to gain the most financial benefit.
Detailed explanation-2: -Matching contributions: are contributions your employer makes to your retirement plan account if you contribute to the plan from your salary, don’t reduce the amount you can contribute to the plan from your salary, grow tax-free while in the plan, and. are taxable only when withdrawn from the plan.
Detailed explanation-3: -Employer Match Does Not Count Toward the 401(k) Limit You can only contribute a certain amount to your 401(k) each year. For tax year 2023, the limit stands at $22, 500, which is up $2, 000 from the 2022 level.
Detailed explanation-4: -Matching 401(k) contributions are the additional contributions made by employers, on top of the contributions made by employees. These matches are made on a percentage basis, such as 25%, 50% or even 100% of the employee’s contribution amount, up to a limit of total employee compensation.