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