What is 401K? What are all its benefits? US retirement plan 401K is explained in Tamil with English subtitles.
00:00 Intro
00:43 What is 401K?
01:03 Contribution Limit
01:29 Employer Match
02:17 Vesting Schedule
03:20 Advantages
03:49 Tax bracket explained
04:26 Marginal Tax Vs Effective Tax
05:48 Tax deferred compounding
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Related Episodes:
Roth 401K:
After Tax 401K:
IRA/Roth IRA:
Tax Saving Priorities in USA:
USA College Savings plan – 529:
USA College expenses:
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DISCLAIMER:
The content of this video is my own opinions and is for information purposes only. It is not intended as a substitute for professional financial advice. It is only intended to provide education about investments….(read more)
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A 401K is a type of retirement plan that is offered by employers in the United States. It allows employees to save for retirement on a tax-advantaged basis. Contributions to the plan are made with pre-tax dollars, which means that employees can reduce their taxable income and enjoy the benefit of tax-deferred growth on their investments.
The 401k plan is named after the Internal Revenue Code section which governs it. It is a type of defined contribution plan, meaning that both employers and employees can contribute to the plan. Employers can choose to match a certain percentage of employee contributions, and there are limits on the amount that can be contributed each year.
Employees can choose how they want to invest their contributions. They can choose from a variety of investment options, including stocks, bonds, mutual funds, and other types of investments. The investments are usually managed by a third-party administrator who is responsible for ensuring that the investments are diversified and managed in accordance with the plan’s rules.
The 401k plan offers several advantages for employees. First, it allows them to save for retirement on a tax-advantaged basis. Contributions are made with pre-tax dollars, so employees can enjoy the benefit of tax-deferred growth on their investments. Second, employers can choose to match a certain percentage of employee contributions, which can help employees save more for retirement. Finally, employees have the ability to choose how they want to invest their contributions, giving them more control over their retirement savings.
Overall, the 401k plan is an excellent way for employees to save for retirement. It offers tax advantages, the potential for employer matching, and the ability to choose how to invest contributions. For these reasons, many employers offer 401K plans to their employees.
Related Episodes:
Tax Saving Priorities in USA: https://youtu.be/nIUxfSXEdHQ
USA College Savings plan – 529: https://youtu.be/LrK1jU01Feo
USA College expenses: https://youtu.be/qMaRl1xPyYM
401k Cost of living adjustments for retirement items limits sollunga sir
Sir, thanks for the clarity. Can you put one video on how to withdraw 401k from India. (i.e. H1B visa holders who are coming back to native country)
Fantastic
Hi Sir,
can you make some video for the people who recently moved to US, like can they avail this 401k with their limited work permit. and other stuff's like tax, money transfer app etc. thanks in advance.
Is it safe or OK to maxout the contributions even in current bad economic situations ?
Good explanation sir.
You are always very clear and crisp to the point that need to conveyed. I think that's your biggest strength. Would love to watch more investment related and savings related videos from you sir! Thank you so much!
Sir enakku monthly salary 15k naa konjo save Panna nenakira enakku intha share market pathila ethum theriyathu enakku intha index fund pathi konjo solluga safe ah epdi choose pandrathu UTI la invest pannalama konjo solluga
Angel one app valiya invest pannalama SIP index fund la
Can you also have a episode on ESPP and what’s a good strategy to use ? My company gives 15% deduction and lock in price for 2 years . Should u sell all the shares once the stock is bought after 6 months and invest that into regular s&p 500 ? Want to know your thoughts .
Hello sir, I'm following all your video from the beginning. It's very useful for my investment planning. Just have a question on SSN tax contribution done in each US payroll.. I have moved back to India 4 yrs before.. is there any option to get claim those SSN contribution done in each payroll ?
சாா், வணக்கம். Indmoney app வழியாக US stocks ல் முதலீடு செய்யலாமா? மற்றும் பாதுகாப்பானதா?
Anna crypto currency pathi sollunga
Sir my husband has 401K and I just started as a 1099 contractor how can I save on 401K please help us
Vijay – Great info. Pls explain on Roth 401k it’s max limit. Pros and cons
Sir can you also pls talk about similar plans like 403(b), 457 etc. what are these…
Vijay Sir, Everytime I see your video I learn something new. I'm saving in 401k for last 5 years and maxing out it's limit. It's only from you I'm learning employer contributions doesn't come under max limit. I'm going to increase contribution from my next paycheck to maxout with just individual contribution.
Dear Vijay, Can you please provide one video on US share market taxation in Equity Markets for long term and short term investments. Also include Dividend taxation as well.
Sir, your videos are inspiring, thanks
I am following you from starting of this year, your videos gives more knowledge about financial independence, thank you, here is my question
Why some popular peoples like Robert Kiyosaki are against 401K? They are talking about fee is more, what happens if the market crash when we retire, can you throw your views on these disadvantages? Thanks
What's the use of knowing retirement plan of Alien country US. Tell something good for Indians in India.
As usual, very useful and very well put it!
Great effort,explanation and calculations. Thanks Vijay.