Questions girl image

Have Questions?

Call (877) 318-7712

Narration

Reason 2: It costs less than you think.

With a traditional 401(k) plan, contributions are made before federal income taxes are withheld. This reduces your current federal taxable income, which lowers the actual impact of contributing on your paycheck.

Your plan may also offer an after-tax or Roth 401(k) option.

Traditional 401(k) Roth 401(k)
  • Contribute with Before-tax dollars
  • Contribute with After-tax dollars
  • Both your contributions and earnings are federal income tax-deferred until distribution.
  • Your contribution is taxable in current year, but all your earnings may be tax free at distribution.
  • Your federal taxable income is reduced by your contribution amount, so it costs less than you think.
    • Income taxes paid at withdrawal
    • Distributions are typically available
      at age 59 ½ or termination of employment
  • Qualified withdrawals are income tax-free, provided you had the account for at least five years and you are:
    • at least age 59 ½
    • disabled or deceased.

*Tax law requirements must be met.

i Disclaimer

By clicking the “Continue" button below you confirm that you have read the "Disclaimer” located on this page.

Enroll Now Continue