A 401(k) is a workplace retirement account, offered as an employee benefit.

This account allows you to contribute a portion of your pretax paycheck in a tax-deferred investment account.

One of the benefits of contributing pretax money is it lowers your amount of taxable income (if you earn $75,000 and contribute $10,000, you are taxed on a $65,000 income). Investment gains grow tax-deferred until retirement.

If you withdraw funds from the plan before 59 1/2, you will pay a 10% penalty and could be subject to federal, state and local income taxes. However, some employers do offer 401(k) loans.

Many employers will match employee contributions to a 401(k), typically up to a certain percent (which may not “vest” for several years, please check with your employer for their vesting schedule).  If you are not contributing up to the company match, you may be ignoring a significant employee benefit.

If you would like more information, please call Kades-Margolis at  
(800) 433-1828, ext. 4, or click here, fill out the form and submit.  We will have one of our associates contact you.

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