401k

[lisajl]

Question for all of you that have a 401K

Here is my situation...

I work for a veterinarian. He is a wonderful boss....he told us a few days ago that he would be starting a 401K for us.

Could you tell me what exactly I have to do.
He said he would have the financial person talk to us...but, we usually have these meetings while we are working. It makes it very difficult to know what it all entails.

Any help/advice would be appreciated.

Thanks..
Lisajl

 

[Dan Murphy]

401(k)'s are retirement plans, Lisa, in which you, as an employee, can defer part of your income, on a pre-tax basis, into a tax-deferred account. The money is invested into investment options that you select from a menu of choices. When you take money from the account, at retirement, taxes are paid then, like a regular IRA. You can defer up to any percentage of your pay, not to exceed $12,000 for calendar year 2003, and, if over age 50, an additional $2,000 may be deferred, for a total of $14,000. Your employer may add money to the plan, either on a matching basis, with some formula, or as a pure contribution, not as a match, or both.

What you need to do is....

1) Decide if you want to participate

2) Decide how much you want to particpate (what % or $ amount)

3) Decide what investment options you want to invest in.

Very importantly, listen to the financial representative who is affilliated with the plan, and complete the risk profile, which will greatly help you allocate your monies, if you do particpate, into a broad, diversified selection of investments, that is correct for YOU.

Good luck and thank your employer that he is putting a plan in.


{not to be taken as financial advice)

 

[Disney Doll]

It's a way of saving towards retirement. It's actually a nice vehicle,as the money is taken out of your gross pay, pre-tax. Many companies have a match, where say they'll give you 35 cents for every dollar you contribute or something to that effect. It's a good, kind of painless way to save, because it really doesn't significantly change your take-home pay.

 

[lisajl]

Thank you very much!

I think the hardest part will be where to invest. That is the big question!

It was certainly nice of my boss to do this, not sure how much he will contribute, but it is the thought that counts.
It is a small business, but he knows what he is doing.

Thanks again for your help! Will definately talk to the financial advisor by myself...let someone else answer those phones or take care of the kitties!

Lisajl