Can somebody explain 401ks to a brainlet?
Can somebody explain 401ks to a brainlet?
Nathan Turner
Lincoln Thomas
Ponzi scheme to fund the retirement of boomers.
Kevin Barnes
national lottery where whoever lives longer takes the money of the dead
Aiden Thompson
Literally this; fpbp
Isaiah Powell
Imagine that 401k is a safe. Every time you get paid, some of your money goes into that safe. The safe remains locked for 40 years with all your money that you keep depositing. If you want to open that safe before the 40 years are up then you must pay a big tax otherwise you don't pay anything on your money after the 40 years.
Camden Cooper
jewish Ponzi scam
Justin Williams
why not just keep all the money and not put it into a 401k then? wow i get my money back in 40 years cool
Easton Carter
Also don't forget that after the 40 years are up and you take the money out, that money is taxed
Brandon Peterson
It's a bit like warcraft but in the far future.
Zachary Adams
For typical 401ks you need to recognize distributions as ordinary income, that's true whether you take distributions at 30 or 59.5 years. The catch is if you take yours before 59.5 years the government takes an extra 10% on top of that. You get to deduct contributions from your taxable income, which is the whole point of them.
You're thinking of Roth 401ks where you get your Roth bags tax free at 59.5 yrs but can't deduct them from your income while you're making contributions.