human
What are the benefits of starting a 40(k)?
assistant
The main benefit of starting a 401(k) is the tax advantages. Contributions made to the 401(k) are tax-deferred, meaning you don't have to pay taxes on them until you withdraw the money in retirement. Additionally, some employers offer a matching contribution to their employees’ 401(k) accounts, giving you even more incentive to save.  2 Another great benefit of the 401(k) is the option to save more in a year than some other retirement savings accounts. The contribution caps (the maximum amount the employee is allowed to contribute annually) are significantly higher than other retirement savings accounts.  3 Finally, having a 401(k) allows you to diversify your investments based on your personal goals. When you open a 401(k), you'll be presented with a range of investment options based on your goals and risk tolerance. By selecting the right option for you, you can grow your retirement savings over time.