1. Your new employer offers a company match 50% up to the first 6% you invest. You decide to contribute 7% of your annual salary of $40,000. What dollar amount will be matched on an annual basis?
2. What is the tax benefit of investing in a company sponsored 401-k?
3. Do you have better odds of becoming a millionaire with buying lottery tickets, or making regular contributions to your retirement account?
1: Annual contribution by employer = 50%*6%*40000 =$ 1200
2: The money contributed reduces the taxable income.The earnings are tax free till withdrawal .
3: The odds of becoming a millionaire are greater with regular contributions to retirement account since there is surety of getting tax deffered earnings on the contributions. Buying lottery tickets and winning the lottery has a very slim chance of success.
1. Your new employer offers a company match 50% up to the first 6% you invest....