Your 401k and You: What You Need to Know

Investing in your future as an entrepreneur

While there are many options to invest in your retirement with, the 401k is one of the most popular, or a least one of the most widely offered, options. “In the United States, a 401(k) plan is the tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code. Under the plan, retirement savings contributions are provided (and sometimes proportionately matched) by an employer, deducted from the employee’s paycheck before taxation (therefore tax-deferred until withdrawn after retirement or as otherwise permitted by applicable law), and limited to a maximum pre-tax annual contribution of $19,000 (as of 2019.)”

The first question you should ask is, is a 401k right for me? I can’t answer that question for you, you’ll have to discover that for yourself.

If it is something that is right for you, then you need to decide how much you should be contributing per month/paycheck. This is, of course, dependent on how much you make, your age and other circumstances. There are plenty of retirement and financial calculators you can utilize. In general, many investment specialists recommended putting about 15% of your income into a 401k.