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Review:

Traditional 401(k) Plans

overall review score: 4.5
score is between 0 and 5
Traditional 401(k) plans are retirement savings accounts offered by employers where employees can contribute a portion of their paycheck before taxes, with the contributions being invested in a variety of funds.

Key Features

  • Tax-deferred contributions
  • Employer matching contributions
  • Investment options
  • Potential for tax advantages

Pros

  • Potential for employer matching contributions
  • Tax advantages on contributions and earnings
  • Variety of investment options available

Cons

  • Limited investment choices within the plan
  • Penalties for early withdrawal before retirement age
  • Tax implications upon withdrawal

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Last updated: Sat, Feb 1, 2025, 01:51:28 AM UTC