by Kristin P. Sinclair – A Accu Tax – May 7, 2022
Many folks have employers who help match the employee 401K contributions up to the amount the employer has pre-established as the employer match. For the dollars you move into your 401K today you lower your taxable income today. If instead your choice is a Roth 401K you are taxed today but years from now, no tax liabilty is applicable so long as you have held your funds in the Roth qualified plan for the required period of time.
You are building your future security for the time you are no longer working.
That period of time could be a longer period that you had previously imaged it would be.
Most working folks realize that their families could need additional funds in the event that the primary wage earner were to pass away, that is when the family is truly grateful for the Life Insurance plan that was already in place.
A term life insurance plan is going to offer lower premiums for the young wage earner and offer protection for the present. That lower premium should help the wage earner plan for the long term future by contributing to the 401K plan or their SEP IRA or their IRA or their Roth IRA while they are earning income.
The wage earner is building a future and protecting their loved ones for the immediate needs by using such a planning approach. Life insurance provides for the immediate lump sum amount of money in the event of the insured death. While you are young and healthy those premiums are low, allowing you to save in a separate savings vehicle. Providing income replacement for the beneficiaries and peace of mind today while planning for the long term by saving separately.
Since very few folks working will have their nest egg already set aside when they are young, some planning and self restraint on current spending can make saving for access to funds later possible.
Kristin P Sinclair A Accu Tax
Rock Hill, SC
May 7, 2022
803-329-0615