What is 401K?

[bika]

My father says it gives him money when he gets retired. I dont understand how it gives more than you have saved. Does any one know about it?

[LissaValerian]

Originally Posted by bika

My father says it gives him money when he gets retired. I dont understand how it gives more than you have saved. Does any one know about it?

401(k) refers to the IRS tax code under which it is authorized. It's an employer sponsored retirement program in which you can contribute part of your salary and, in some cases, your employer might make a match. Basically this money is then invested in a variety of mutual funds, stocks, bonds, etc. Usually there is some flexibility in what types of funds you can invest your 401(k) in.

I work for a nonprofit agency, so my retirement plan is a 403(b), not a LOT different, the name refers to the IRS tax code where that particular retirement plan is authorized.

Your retirement can do well, particularly if you invest in companies that grow and prosper. People who invested in Microsoft for example, when they were just a startup, are now sitting nicely. People who invested in Enron, however, lost their investments. A perfect example of why you shouldn't invest all in one company or type of fund.

401(k) - Wikipedia, the free encyclopedia

[puchchu]

I was looking for the info thanks buddy!