Today’s Most Popular Choice
Most employees are familiar with 401(k) retirement plans. In industry surveys, employees often rank 401(k)s second — right behind health plans — when asked about the company-sponsored benefits they value most.
With a 401(k) plan, eligible employees can contribute part of their pay into a tax-deferred account in the plan. But why have they become so popular?
The biggest reasons are these:
- Employees make their contributions before taxes are withheld from their paychecks. This immediately reduces their income tax withholding and tax liability, making it much easier for them to save.1
- Employers often choose to match a portion of the employee's contribution. To employees, that's free money!
- Many plans offer a wide range of investment options, giving employees greater control over their own retirement destiny.
The bottom line: Employees today expect their employers to offer a 401(k) plan. The Standard offers traditional and Roth 401(k) plans.
1 Withdrawals from the tax-deferred account will be subject to federal and possibly state income tax.