Congratulations to RP Companies on rolling out their new 401(k) plan for it’s employees!
Under the new plan, retirement savings contributions are provided by RP Companies and deducted from the employee’s paycheck before taxation. Meaning all contributions are tax deferred until the money is withdrawn during retirement. Therefore, each employee is creating a retirement savings account and making a commitment towards saving for the future.
401(k) plans are one of the best ways to save for retirement. With many different types of plans, an employee can decide how they would like to invest their money. Some plans may be considered a safer investments, because the risk is lower and the yield is more long term, while other plans may be considered a high risk investments because the risk is higher and the yield is more short term. Employees can determine which type of investment is best for them.
Some of the advantages of investing in a 401(k) plan are:
- Lower taxable income
- Savings and earnings accumulate without having to remember to make deposits
- Employees are in control of how their money is being invested
- The opportunity to retire and not have to worry about money
Employees may also choose to set up an Individual Retirement Account or IRA through another financial institution to increase their contributions towards retirement. Just like a 401(k), an IRA plan provides tax advantages for retirement savings.
“Once you begin taking care of your money, I can promise that your money in turn will take care of you.” – Suze Orman