Internal Revenue Code Section 401k retirement plans allow an employer to
establish a convenient retirement planning model and a savings model
which permits owner/employees to voluntarily direct a maximum of $13,000
(indexed) during the 2004 calendar year) into the retirement plan BEFORE it is
federally (and state) taxed. These tax-deferred contributions are credited to
the participant's account which is invested in professionally-managed
investments. These earnings are reinvested without being subject to current
federal (or state) taxation. Funds are generally withdrawn during retirement
and taxed (if taxable) at lower income tax rates. Funds may also be withdrawn
prior to retirement under certain circumstances.
The 401k retirement plans are probably the fastest growing mode of retirement
planning in the country. Employers find 401k retirement plans
cost-efficient and an attractive addition to their benefits package. The 401k
retirement plans
also help their assets grow rapidly when employers and employees are both
contributing. Employer and employee contributions to a 401k retirement plans
can accumulate into a comfortable retirement planning model for all employees.
PRO uses sophisticated planning models and techniques to prepare recommendations
on any retirement planning need.
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