In today’s Financially Wise Living episode, I’m going to give you the lowdown on your 401k so you’re clear about how exactly the contributions you make are working for you.
First things first: A 401k is not an actual investment—it’s a retirement account that’s offered by your employer. You can contribute as much as you want to your 401k (it’s tax deductible!), although there is a max limit (in 2015, it’s $18,000). And some employers will even match your 401k contributions—so if yours is one of them, take advantage of it, as it’s basically considered free money. Who doesn’t want that?!
So, what happens to your money after you contribute to your 401k? Well, that’s up to you: You can decide to leave it in cash or invest into something else (like mutual funds that are offered within your plan). But be careful about withdrawing from your account—unless you’re 59 ½ years old, you’ll be charged a penalty.
In this video, I’m sharing even more about what you need to know about your 401k, whether you’re thinking about opening one or you’ve been investing for years.
And if you’re not already, be sure to follow me on Instagram @brittneycastro. Every day I share behind-the-scenes peeks of what’s going on at Financially Wise Women HQ, as well as tips and tricks for using your money to fund the life of your dreams. I’d love to have you along for the ride!
Love and success,
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial adviser prior to investing. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes.