What Are the Tax Implications for 401(K) Earnings?
In this video, Marguerita Cheng explains that the main benefit of participating in a 401(k) is the ability to save on taxes now while allowing your investments to grow tax-deferred until withdrawal.
Video Transcript
The benefit to participating in a four zero one is the ability to save money and taxes today. When your money is growing, it is growing tax on a tax deferred basis. That means not only did you save money today, but you didn't have to pay taxes while your money was growing. You only pay taxes when you take your money out.
