Wednesday, January 5, 2011

Funding a 401k for Free Money!

Many of us have a 9-5 job which allows us to participate in a 401k plan. What many people do not know is that you can actually get free money from your employer by participating in your company 401k plan.

Participating in a 401k plan is a good way to reduce your taxes and build a nest egg for retirement. Typical 401k plans have a company match usually the first 6% of your salary for 50 cents per a dollar you contribute For example if you make $50,000 a year you would get $1,500 in free money a year if you put in $3,000 of your own money.

One thing before leaving a company is to make sure the vesting period for the free money your received is yours completely. Some companies may have a 1 year vesting period others may have a 3 year vesting period.

Happy Saving!

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