401k VS life insurance: Why should you opt for the 401k plan?
In the 401k plan , a fixed portion of their income is deposited into an investment account where the money can be further invested in various schemes such as bonds and mutual funds. Life is very unpredictable. This is where your savings and investments will help you out financially. When it comes to financial planning, there are two important plans that you must know. Between 401k VS life insurance , why should you opt for the 401k plan? Under the IRC - Internal Revenue Code released by the US government, there is a retirement plan known as the 401(k). This plan is specially designed for working people to save a part of their salary during their employment period. Types of 401k There are two types of 401k. They are distinguished based on when the investment deduction is made, before or after the income tax deduction. ● Traditional 401k In this system, the deduction is made from the employee's gross income, which means the deduction is made before the income tax is deducted. However