small 401k plans and IRA rollover education for small businessessmall 401k plans and IRA rollover education for small business 401k plans. Following topics are addressed:
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small 401k plans and IRA rollover education for small businessessmall 401k plans and IRA rollover education for small business 401k plans. Following topics are addressed:
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| The tax deferral of 401k has a huge compounding effect: $150 per month put into a typical taxable savings account paying 8% annual interest will grow to $42,034 by the end of 20 years (assuming a combined federal and state personal income tax rate of 34%). In a 401(k), however, the same deposits earning the same rate of return during the same 20 years will yield $88,353 . Even if that amount is taxed at the 34% rate when the money is withdrawn from the plan, which is unlikely if the participant is retired, the 401(k) participant will walk away with more than $16,000 compared to the equivalent non-401(k) investment return. |  |
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