Paying 401(k) taxes: Why later doesn’t always mean less

The Pros and Cons of 401(k)s

Four in 10 Americans use a 401(k) to fund their retirement with pre-tax dollars.¹ Many employers even provide matching contributions. It’s a no-brainer, right? Well, consider that, once you retire, a large chunk of your nest egg could be headed for the IRS. Your 401(k) distributions can also impact Social Security and Medicare benefits.

This quick read offers some pros and cons of 401(k)s. Experienced investors and small business owners have other options, too. Please contact me if you’d like to hear more.

^{1.New Data Reveal Inequality in Retirement Account Ownership, U.S. Census Bureau, August 31, 2022.}

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