« Momentum trading in commodity futures markets | Home | Opening Up a Roth IRA »
The Hidden Truth About 401K’s and IRA’s
By Capitalist | April 21, 2009
401K’s and IRA’s are savings accounts that are sanctioned by the federal government. These are meant for tax-postponement. Such retirement accounts do not seek to abate taxes. They simply wish to pay a part of their savings account drift in old age towards tax compensation.
Old people are made to believe that owing to tax benefits they will be able to make a living in about 2/3rd of the money they required while they were young. Unfortunately it is not so.
There are certain drawbacks that are not clearly manifest with these accounts. The payee never gets to know about the amount of tax until the time of payment comes. (That is when he begins to withdraw money). This means that he is not sure of the formula of tax calculation or the tax bracket that he would fall into. This is kept very close to the heart by taxing authorities.
Topics: Finance & Legal, Financial planning, Personal Finance | No Comments »