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What are the benefits of using a 401k?
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The most obvious benefit is that it allows you to save for retirement early in your career, when you may not have as much money as you do later on. 2 Another benefit is that contributions to a 401(k) plan are typically made with pre-tax dollars, meaning you pay taxes only when you withdraw from the account. This can be beneficial because it means more money is available to you throughout your working years. 3 A third benefit is that 401(k) plans often offer employer matching contributions, which means that if your company offers a match, you will get a portion of your contribution back from the company. 4 Finally, many 401(k) plans also provide additional benefits such as access to investment advice and financial planning services, which can help ensure your savings goals are met over time.