Founder, Abrams Insurance Solutions, Inc., San Diego, CA
Yes, a 401K would count as a retirement plan, but ideally it will be supplemented by other vehicles as part of a complete retirement plan.
401(k)s are qualified plans which means the money goes in pre-tax and is tax-deferred until it is taken out in retirement. 401(k)s limit the amount of contribution and there are penalties if the money is accessed before the age of 59.5. The funds saved in a 401(k) are tax -deferred which is good, but it might not be your best option if you are in a higher tax bracket at retirement. Depending on how your 401(k) is invested, there may be market-risk to be aware of as well.
A 401(k) can be an important part of a retirement plan, but it would be best to only contribute up to the company match and use a tax-free option or different vehicle to save above the company match.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Does a 401k count as a retirement plan? Yes, a 401k would be considered a qualified retirement plan. 401k plans were originally created to be a supplement to traditional pension plans in the 1980s but rather quickly 401k plans actually began to replace traditional retirement plans as 401k plans presented an opportunity for employers to shift liability to employees in regard to their retirement. Retirement went away from an employer's responsibility to an employees.
A 401(k) is an account designed to grow monies tax deferred and is part of a retirement plan. A retirement plan will consist of looking at how much you are saving today and where as well as how much you need or should save, taking into account Social Security and other sources of potential income as well.
A plan or "road map" as I like to call it is something which should get updated regularly as well since "life" is always throwing curve balls at us.
I recommend talking to someone who is knowledgeable with retirement planning and who you can work with for the years to come.
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401(k)s are qualified plans which means the money goes in pre-tax and is tax-deferred until it is taken out in retirement. 401(k)s limit the amount of contribution and there are penalties if the money is accessed before the age of 59.5. The funds saved in a 401(k) are tax -deferred which is good, but it might not be your best option if you are in a higher tax bracket at retirement. Depending on how your 401(k) is invested, there may be market-risk to be aware of as well.
A 401(k) can be an important part of a retirement plan, but it would be best to only contribute up to the company match and use a tax-free option or different vehicle to save above the company match.
A plan or "road map" as I like to call it is something which should get updated regularly as well since "life" is always throwing curve balls at us.
I recommend talking to someone who is knowledgeable with retirement planning and who you can work with for the years to come.