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ALERT

Industrial Giant Impresses with 19% Gain

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If you’re like most Americans, your 401(k), 403(b) or similar retirement account is your largest asset. That’s a good thing. We all know that we need to save a ton for retirement as it continues to get more and more expensive. And we all know that deferring the taxes on those savings will help grow our nest eggs even faster. After all, absent of taxes, there will be more money available for compounding. That helps to supercharge our savings.

The downfall in all of this is that we can’t postpone that tax deferral forever. Uncle Sam wants his share.

Uncle Sam wanting a share is actually becoming a big issue for retiring Baby Boomers. This generation built their retirement plans/savings around IRAs, 401(k) plans and other tax-deferred savings vehicles. The bulk of their money is in these vehicles and that could be setting themselves up for a major tax headache later on in life.

401ks Are Great to a Point

One of the best things about a 401k plan is that it’s automatic. You simply elect a percentage of your pay and your employer sends that money off to your investment account each time you get paid. It never even hits your wallet. And when you add the potential of an employer match and tax deferrals to the equation, the benefits of the account really take shape. Because of its ease of use and advantage, most market pundits suggest trying to max out a 401k account each year.

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