A large number of employers in the Seneca, SC, area off employees a 401(k) program. This offers significant tax advantages for the employee, as deductions can be made from they payroll directly to find the plan.
At the same time, the companies in Seneca, SC, may offer to match up to 100% of the amount the employee contributes on an annual basis, which can effectively double the savings in these accounts. At the same time, all taxes on the 401(k) plan are deferred until the money is withdrawn. A Roth 401(k) allows for the individual to pay taxes now when they have an income, and withdraw from the plan without any taxes.
Matt Dixon, a Registered Financial Consultant, assists employees and business owners in maximizing the tax advantages and donations to their 401(k) plans. Small business owners have added tax advantages with this type of arrangement, which makes it a particularly appealing retirement and tax-advantaged option.
Early Withdrawals
One of the most common mistakes financial advisors like Matt Dixon see with 401(k) plans is early withdrawal. While there may be genuine emergency reasons to access the funds if nothing else is available, the 401(k) funds should never be the first option considered.
While early withdrawals do have a hefty tax penalty, there is also the challenge of playing catchup to get back to the previous amount before you start adding to your retirement fund.
If you are in need of emergency funds or are considering accessing your 401(k) savings, schedule a consultation with Matt Dixon In Seneca, SC to consider the possible alternatives to tapping into your retirement fund.
