Oh, Boy ! A 401K — What the Hell is a 401K
Ask people about their benefits at work and a lot of people are very happy that they have a 401K -- Ask that same person, "What is a 401K", and chances are they can only give you a vague general answer that it has something to do with retirement.
Well, those people are not in the minority by any measure. Most people have no idea what the coveted 401K is all about. Do you really know?
Sometimes it feels like you need to be an economics expert to understand your own paycheck. More than half of Americans are confused by the terms of their401(k) plans and wish there was an easier way to make investment decisions. Nearly 50% say they don’t know what their best investment options are, and more than 30% feel stressed out by their 401(k). For anyone who’s confused right this second, here’s a quick crash course: a 401(k) is a retirement plan to which employees contribute. The 401(k) has largely replaced the traditional pension plan, which takes financial contributions from companies and workers and is managed by employers. While traditional pension plans guarantee money at retirement, with a 401(k) there is no guarantee. Plus, it’s up to the employee to manage their own investments with a 401(k)- something that’s difficult, confusing and stressful to most Americans. If your head is spinning right now…at least you’re not alone.
If you aren't exactly sure about your 401K plan, or if you want to know if a 401K would be right for you, just follow this LINK.