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401K Massachusetts

While a 401(k) plan isn't a magic guarantee that if you participate you will be able to retire in Tahiti at age 55, it can be a major part, perhaps even the most important part, of your retirement planning strategy. For many people in Massachusetts, especially those who do not own homes, their 401(k)'s can be their biggest assets.
1. Local Companies
2. The Tax Reform Act
3. Your 401(k) Plan is Tax-Deferred
4. Your 401(k) Plan Can Protect You
5. Featured National Company

1. Local Companies

Accounting & Tax Services
(617) 889-5234
80 Everett Ave
Chelsea, MA
Kligman Harold A
(617) 479-8756
111 Willard St
Quincy, MA
Savage Jerald S CPA
(781) 828-0574
1 Cabot Pl
Stoughton, MA
Shelrick Assoc Inc
(781) 674-9400
Lexington, MA
Ledger Plus
(781) 344-9294
378 Page St Ste 3
Stoughton, MA
Silverman Jeffery CPA
(978) 750-4240
100 Conifer Hill Dr
Danvers, MA
Moise Tax & Accounting Services
(508) 580-8990
105 Main St
Brockton, MA
Weiner Alan M CPA
(617) 266-5100
464 Commonwealth Ave
Boston, MA
Walsh Richard T CPA
(978) 887-3532
37 Candlewood Dr
Topsfield, MA
P M Associates
(617) 783-3131
Brighton, MA


2. The Tax Reform Act

401 plans were first authorized by a section of The Tax Reform Act that Congress passed in 1978. It took several more years until the actual regulations were put into place. So beginning in 1982, taxpayers were able to begin making contributions to their plans for the first time. It wasn’t until 1991, however, that the final regulations were published.

The name of the program comes from the place where it is listed in the Internal Revenue Service tax code: section 401, paragraph (k).

Not every employee in Massachusetts is eligible; those who work for tax-exempt organization, such as churches, public schools, or hospitals cannot participate. But for these employers, there are similar 403(b) plans available.

But the basic idea of each plan is the same: your employer deducts a certain percentage of your gross earnings from each paycheck and puts it into a retirement plan for you. Its all done automatically, with the amount deducted reported to you on each paycheck stub.

3. Your 401(k) Plan is Tax-Deferred

Your automatic deductions are done on a pre-tax basis. This doesn’t mean that they are “tax free,” it just means that you don’t pay taxes on these amounts until, ideally, you are at least 59 and ½ years old, you retire, and you start to receive distributions from your plan. (There are certain instances in which you can receive distributions from your plan before you are 59 and ½ years old, but you generally want to do this unless you have to.)

The tax-deferred contributions are invested in securities or stocks and are then allowed to grow until they are withdrawn when the participant retires. Unlike regular stock market investments, you are not faced with paying capital gains taxes when your 401k investments increase in value.

What does this mean right now, when you are making contributions to your plan? It means that your employer is reporting a lower adjusted gross income to your employer. Although you’re still making the same amount of money, according to the IRS, you’re making a smaller amount of taxable income and your tax liability is lowered. This reduces the amount of taxes you must pay at the end of the year.

For example, suppose that you receive a paycheck for $1,000. If you put $50 of that amount into a 401 k plan, your taxable income is only $950.

This is often considered one of the major benefits of a 401(k) plan. If you contribute enough to the plan, you might even put yourself into a lower tax bracket. In addition, because certain IRS credits, such as child tax credits, depend on a worker’s adjusted gross income, you may even lower your taxable income enough to be eligible for additional credits, while saving for retirement at the same time.

Because you lower your adjusted gross income when you contribute to a 401(k) plan, you also lower the amount of state taxes you must pay (if your state has a state income tax).

Of course you have to pay taxes on this income when you retire. But since incomes often drop when people retire, you may be in a lower income bracket by then and pay less in taxes.

4. Your 401(k) Plan Can Protect You

With pension plans from employers now a rarity, the 401k-retirement savings plan may well be the main source of retirement income for many people in Massachusetts. Utilize your human resources department to make sure you know what is available to you for retirement options, and that you understand your available benefits. Don’t wait for them to come to you, because they probably won’t.

Few middle- and low-income people are able to buy significant amounts of stocks and bonds on their own; most don’t have a broker. Few will have Certificates of Deposits or large amounts of savings. Few in this category are able to put money into 402 plans, or even understand how to utilize them.

Of course, there are always Social Security payments. But if you rely exclusively on that, you’re very likely to be disappointed. Social Security payments can be as low as several hundred per month. And unless the government radically changes the rules in the future, you’re not likely to receive more than a few thousand dollars a month from Social Security payments, regardless of how much you earned during your lifetime.

If you have to live on Social Security alone, that could represent a radical drop from your pre-retirement income. You don’t want to go from a middle-class lifestyle to poverty. Many of us dream that we’ll be better off after we retire; few of us realize that without careful planning things could be worse.

5. Featured National Company

Professional Capital Services, LLC

215-575-7298
3200 Mellon Bank Center
Philadelphia, PA
www.pcscapital.com

Read more about 401K

Regional Articles
- 401K Abington MA
- 401K Acton MA
- 401K Acushnet MA
- 401K Agawam MA
- 401K Allston MA
- 401K Amesbury MA
- 401K Amherst MA
- 401K Andover MA
- 401K Arlington MA
- 401K Ashland MA
- 401K Athol MA
- 401K Attleboro MA
- 401K Auburn MA
- 401K Bedford MA
- 401K Belchertown MA
- 401K Bellingham MA
- 401K Belmont MA
- 401K Beverly MA
- 401K Billerica MA
- 401K Boston MA
- 401K Braintree MA
- 401K Bridgewater MA
- 401K Brighton MA
- 401K Brockton MA
- 401K Brookline MA
- 401K Burlington MA
- 401K Buzzards Bay MA
- 401K Cambridge MA
- 401K Canton MA
- 401K Carver MA
- 401K Centerville MA
- 401K Charlestown MA
- 401K Charlton MA
- 401K Chelmsford MA
- 401K Chelsea MA
- 401K Chestnut Hill MA
- 401K Chicopee MA
- 401K Clinton MA
- 401K Concord MA
- 401K Danvers MA
- 401K Dedham MA
- 401K Dracut MA
- 401K Dudley MA
- 401K Duxbury MA
- 401K East Bridgewater MA
- 401K East Falmouth MA
- 401K East Longmeadow MA
- 401K East Weymouth MA
- 401K Easthampton MA
- 401K Everett MA
- 401K Fairhaven MA
- 401K Fall River MA
- 401K Feeding Hills MA
- 401K Fitchburg MA
- 401K Foxboro MA
- 401K Framingham MA
- 401K Franklin MA
- 401K Gardner MA
- 401K Gloucester MA
- 401K Greenfield MA
- 401K Hanover MA
- 401K Haverhill MA
- 401K Hingham MA
- 401K Holbrook MA
- 401K Holden MA
- 401K Holliston MA
- 401K Holyoke MA
- 401K Hopkinton MA
- 401K Hudson MA
- 401K Hull MA
- 401K Hyannis MA
- 401K Hyde Park MA
- 401K Ipswich MA
- 401K Jamaica Plain MA
- 401K Kingston MA
- 401K Lawrence MA
- 401K Leominster MA
- 401K Lexington MA
- 401K Longmeadow MA
- 401K Lowell MA
- 401K Ludlow MA
- 401K Lynn MA
- 401K Lynnfield MA
- 401K Malden MA
- 401K Mansfield MA
- 401K Marblehead MA
- 401K Marlborough MA
- 401K Marshfield MA
- 401K Mashpee MA
- 401K Mattapan MA
- 401K Maynard MA
- 401K Medfield MA
- 401K Medford MA
- 401K Medway MA
- 401K Melrose MA
- 401K Methuen MA
- 401K Middleboro MA
- 401K Milford MA
- 401K Millbury MA
- 401K Milton MA
- 401K Natick MA
- 401K Needham MA
- 401K New Bedford MA
- 401K Newburyport MA
- 401K Newton Center MA
- 401K Newton MA
- 401K Norfolk MA
- 401K North Adams MA
- 401K North Andover MA
- 401K North Attleboro MA
- 401K North Dartmouth MA
- 401K North Easton MA
- 401K North Reading MA
- 401K Northampton MA
- 401K Northborough MA
- 401K Norton MA
- 401K Norwood MA
- 401K Oxford MA
- 401K Peabody MA
- 401K Pembroke MA
- 401K Pepperell MA
- 401K Pittsfield MA
- 401K Plymouth MA
- 401K Quincy MA
- 401K Randolph MA
- 401K Raynham MA
- 401K Reading MA
- 401K Rehoboth MA
- 401K Revere MA
- 401K Rockland MA
- 401K Roslindale MA
- 401K Salem MA
- 401K Sandwich MA
- 401K Saugus MA
- 401K Scituate MA
- 401K Seekonk MA
- 401K Sharon MA
- 401K Shrewsbury MA
- 401K Somerset MA
- 401K Somerville MA
- 401K South Dartmouth MA
- 401K South Hadley MA
- 401K South Weymouth MA
- 401K Southbridge MA
- 401K Spencer MA
- 401K Springfield MA
- 401K Stoneham MA
- 401K Stoughton MA
- 401K Sudbury MA
- 401K Swampscott MA
- 401K Swansea MA
- 401K Taunton MA
- 401K Tewksbury MA
- 401K Tyngsboro MA
- 401K Uxbridge MA
- 401K Wakefield MA
- 401K Walpole MA
- 401K Waltham MA
- 401K Wareham MA
- 401K Watertown MA
- 401K Wayland MA
- 401K Webster MA
- 401K Wellesley Hills MA
- 401K Wellesley MA
- 401K West Newton MA
- 401K West Roxbury MA
- 401K West Springfield MA
- 401K Westborough MA
- 401K Westfield MA
- 401K Westford MA
- 401K Weston MA
- 401K Westport MA
- 401K Westwood MA
- 401K Weymouth MA
- 401K Whitman MA
- 401K Wilbraham MA
- 401K Wilmington MA
- 401K Winchester MA
- 401K Winthrop MA
- 401K Woburn MA
- 401K Worcester MA
- 401K Wrentham MA
Related Local Event
Commodities Portfolio Management 2008
Dates: 9/15/2008 - 9/17/2008
Location: Renaissance Boston Waterfront Hotel
Boston MA
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