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According to the IRS.gov site the the maximum contribution limit for 2009 is $16.500. If your friend contributes the maximum this about would be subtracted from her taxable income. The amount she saves would depend on her tax rate. The most current tax rates I found on the IRS site can been seen by clicking the link provided.
What else can I help you with?
Do employers have a legal obligation to provide employees with a retirement plan?
Employers are not legally required to provide employees with a retirement plan, but if they do offer one, they must comply with certain regulations outlined in the Employee Retirement Income Security Act (ERISA).
What are the differences between contributing to a before-tax vs Roth 401k and how do these options impact my retirement savings?
Contributing to a before-tax 401(k) reduces your taxable income now, but you'll pay taxes on withdrawals in retirement. Contributing to a Roth 401(k) doesn't reduce your taxable income now, but withdrawals in retirement are tax-free. The choice impacts your retirement savings by affecting when you pay taxes on the money and how much you'll have available for retirement.
What are the differences between contributing to a pre-tax 401k and a Roth 401k, and how do these options impact my retirement savings?
Contributing to a pre-tax 401k reduces your taxable income now, but you pay taxes on withdrawals in retirement. A Roth 401k is funded with after-tax money, so withdrawals in retirement are tax-free. The choice impacts your retirement savings by affecting when you pay taxes on the money and how much you ultimately keep.
Which is not a benefit of contributing to a retirement account?
One potential drawback of contributing to a retirement account is the lack of immediate access to funds. While these accounts offer tax advantages and help grow savings for the future, early withdrawals can incur penalties and taxes, limiting financial flexibility in case of emergencies. Additionally, contributing a significant portion of income to retirement accounts may reduce available cash flow for current expenses.
Which is better: contributing to a 401k pre-tax or after-tax?
Contributing to a 401k pre-tax is generally better because it reduces your taxable income now and allows your investments to grow tax-deferred until retirement.
Do employers have a legal obligation to provide employees with a retirement plan?
Employers are not legally required to provide employees with a retirement plan, but if they do offer one, they must comply with certain regulations outlined in the Employee Retirement Income Security Act (ERISA).
What are the differences between contributing to a before-tax vs Roth 401k and how do these options impact my retirement savings?
Contributing to a before-tax 401(k) reduces your taxable income now, but you'll pay taxes on withdrawals in retirement. Contributing to a Roth 401(k) doesn't reduce your taxable income now, but withdrawals in retirement are tax-free. The choice impacts your retirement savings by affecting when you pay taxes on the money and how much you'll have available for retirement.
Which act of legislation permitted large employers to self insure employee healthcare benefits?
ERISA - The Employee Retirement Income Security Act of 1981
Do I have to pay taxes on my retirement?
Yes, you have to pay taxes on your retirement at a rate determined by your retirement income, which should be much lower than your working income. Yes, you have to pay taxes on your retirement at a rate determined by your retirement income, which should be much lower than your working income.
What are the differences between contributing to a pre-tax 401k and a Roth 401k, and how do these options impact my retirement savings?
Contributing to a pre-tax 401k reduces your taxable income now, but you pay taxes on withdrawals in retirement. A Roth 401k is funded with after-tax money, so withdrawals in retirement are tax-free. The choice impacts your retirement savings by affecting when you pay taxes on the money and how much you ultimately keep.
Which is not a benefit of contributing to a retirement account?
One potential drawback of contributing to a retirement account is the lack of immediate access to funds. While these accounts offer tax advantages and help grow savings for the future, early withdrawals can incur penalties and taxes, limiting financial flexibility in case of emergencies. Additionally, contributing a significant portion of income to retirement accounts may reduce available cash flow for current expenses.
Which is better: contributing to a 401k pre-tax or after-tax?
Contributing to a 401k pre-tax is generally better because it reduces your taxable income now and allows your investments to grow tax-deferred until retirement.
What are the differences between contributing to a pre-tax vs after-tax 401k, and how do these choices impact my retirement savings?
Contributing to a pre-tax 401(k) reduces your taxable income now, but you'll pay taxes on withdrawals in retirement. After-tax 401(k) contributions are made with money that has already been taxed, so withdrawals in retirement are tax-free. Your choice impacts how much you pay in taxes now and in retirement, affecting your overall retirement savings.
Does AARP offer a retirement income calculator?
"AARP does offer a retirement income calculator. This calculator is found under AARP's ""Planning Retirement Income"" and the calculator is located right there."
Can you explain how a SEP IRA works?
A SEP IRA is a retirement account for self-employed individuals or small business owners. Employers can contribute a percentage of their income to the account, which is tax-deductible. Employees do not contribute to a SEP IRA. The money in the account grows tax-deferred until retirement, when withdrawals are taxed as income.
Do you have to file taxes on retirement?
Yes and it is very possible that some of the retirement income could be taxable income on your income tax return.
Do you have to file taxes on retirement in Virginia?
Yes and it is possible for some of the retirement income to be taxable income in Virginia.
