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Take advantage of employersponsored retirement plans from "summary" of The Only Investment Guide You'll Ever Need, Revised Edition by Andrew Tobias
One of the most valuable benefits that many employers offer is a retirement plan. This is a way for employees to save for their future and take advantage of potential tax benefits. By participating in an employer-sponsored retirement plan, you can set aside a portion of your income on a regular basis to be invested for your retirement. This can help you build a nest egg over time and provide financial security in your later years. Employer-sponsored retirement plans often come with matching contributions from the employer. This means that for every dollar you contribute to the plan, your employer will also contribute a certain amount. This is essentially free money that can help boost your retirement savings significantly. It is important to take full advantage of these matching contributions, as they can make a big difference in the long run. Another benefit of employer-sponsored retirement plans is the potential for tax advantages. Contributions to these plans are typically made on a pre-tax basis, which means that the money is deducted from your paycheck before taxes are taken out. This can lower your taxable income and reduce the amount of taxes you owe. Additionally, the earnings on your investments within the retirement plan grow tax-deferred, meaning you won't have to pay taxes on them until you withdraw the money in retirement. In order to make the most of your employer-sponsored retirement plan, it is important to carefully consider your investment options. Many plans offer a variety of investment choices, such as mutual funds or target-date funds. It is important to review these options and choose investments that align with your risk tolerance and long-term goals. Diversifying your investments can help manage risk and potentially increase returns over time.- Participating in an employer-sponsored retirement plan can be a smart financial move. It allows you to save for retirement in a tax-advantaged way and take advantage of potential employer matching contributions. By carefully selecting your investments within the plan and regularly contributing to it, you can build a solid foundation for your future retirement.
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