Use your 401k

Another thing that you need to plan for is retirement. I hate to break this to you but social security will not be there for you if you are my age, or it will not be enough for you to support yourself. Luckily, there are other options for you to plan for retire, and in most cases, the government will subsidize your saving through tax incentives. The most common form of retirement vehicle that you have probably heard of is a 401k that is what I am going to cover today. Most companies offer a 401k plan for you to use. To make this an even better deal they will match your contribution. How can you complain with that, it is free money? The other advantage is your contribution, is deducted from the income that is on your W-2. For instance, let’s say you make $50,000 a year, and you contribute$5,000 and you are in the 15% tax bracket. Your taxes would decrease by $750, because you 1040 would state your top line income at $45,000. On top of that, let us say your employer matches you 50 cents on every dollar you contribute you would have $7,500 for retirement and it only cost you $4,250. The money you put away grows tax-free until you pull it out at retirement, so no capital gains taxes on dividends etc.