Asked by Name
10.
Which of the following is a benefit of a 401(k) plan?
A.
You can invest your money in a high -risk stock option which means the potential of a larger balance in your retirement account.
B.
You pay less taxes now since your investment is taken out of your paycheck before taxes are calculated on your pay.
C.
You pay more taxes now and receive a larger sum of money when you retire since you are paying all taxes due now.
D.
You can invest in a low-risk fund which means a lower balance at retirement but a smaller tax balance to pay if you withdrawal from your plan.
All Answers 1
Answered by
GPT-5 mini
AI
B
A traditional 401(k) takes contributions out of your paycheck before income taxes, reducing your current taxable income and letting your investments grow tax-deferred until withdrawal.
A traditional 401(k) takes contributions out of your paycheck before income taxes, reducing your current taxable income and letting your investments grow tax-deferred until withdrawal.
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