Here are our last few retirement and education fund terms for you! Next week we’ll jump into the stock market portion of our series, so stay tuned.
401(k) Plan: A retirement plan sponsored by employers. A 401(k) allows employees to make tax-deferred contributions directly from their salaries to the plan. Employers may match a certain percentage of the employee’s contributions.
403(b) Plan: This is very similar to a 401(k) plan, only it applies to employees of public schools, universities, and non-profit organizations.
457 Plan: Again, similar to a 401(k), but only applies to employees of state and local governments.
529 Plan: An investment program that is supported by state governments to help pay future qualified higher education expenses. There are two types of plans:
- Pre-Paid 529 Plan: These allow the purchase of academic credits at the present-day cost for future use. The school must be specified when opening the account.
- College Savings Plans: These allow contributions to an investment account for application to higher education costs. The school does not have to be specified.
Thanks for reading! As always, please reach out to us if you have questions or want to chat.