Saving for retirement is one of the most important things that you should be doing if you work for an employer that offers a 401(k) plan. Are you saving enough for retirement? It is suggested to be able to replace 82% of your income to maintain a similar lifestyle during retirement years. Contributions are automatically withdrawn from employee paychecks and invested into funds of the employees choosing. 401(k)s have an annual contribution limit of $20,500 in 2022 or $27,000 for those age 50 or older. There are 2 options when it comes to 401(k), Pre-tax or Roth. Pre-tax gives you the opportunity to contribute without paying taxes on that portion – but you have to pay tax at retirement and Roth allows you to pay tax now, and have tax free growth with minimal taxes due at retirement.
Important information you need to remember:
- 401(k) limits for 2022
- $20,500 for individuals under 50
- $27,000 for individuals 50 and older
- There’s two options when it comes to contributing
- Pre-tax : Allows you to save money pre tax, but you will have to pay tax on those dollars at retirement. May lower your taxable income.
- Roth : Allows you to pay tax on those dollars now. Grows tax free, and minimal taxes due at retirement.
Have a 401(k) with ABC? Here’s how to view your online account:
- Go to www.principal.com/welcome
- Click “Get Started.”
- Enter your first name, last name, DOB, mobile
- phone number and zip code.
- Agree to do business electronically and click Continue.
- Enter in your mobile phone number.
- Create a unique username and a securepassword, then your email address.
- Select and answer three security questions.
- You now have access to your online account!
