Here Are Some Of The Benefits:
When you save in the plan, the company may make a contribution to help you save more. The typical optional contribution is $0.50 for every $1 you contribute up to 10% of your pay.
Essentially, the company contribution is free money—and that’s a deal too good to pass up.
Contributions to your account come directly from your paycheck, so you’ll be paying yourself first every payday—before you have a chance to spend the money.
When you contribute to the plan, you get a tax break on your contributions and the money they earn. You won’t pay any taxes on your money until you withdraw it.*
*You may have to pay ordinary income tax plus a 10% federal penalty on withdrawals from a tax-deferred investment before age 59½.
Year after year, any money you invest has a chance to make money (earnings). That money can then make even more money (compounding), and so on. Over time, this compounding effect could make a big difference in the amount you’re able to save for your future.
The more you save—and the earlier you start—the greater the opportunity your savings have to grow.