11075 South State Street
Heritage Solutions GroupAt Heritage Solutions Group, caring for our clients is a family affair. We pride ourselves on being a multi-generational family of professionals. Our team includes financial professionals, each with 18 years or more in the financial services industry. We specialize in retirement planning, estate planning, and 401(k) planning in and around Sandy, Utah. The client-centered process we use ensures our clients are served in a manner that suits their individual financial needs. We advocate for your unique values. Let us help you take your 401(k) planning goals to the next level and beyond.
401(k) Retirement PlanWhat is a 401(k) Retirement Plan? A 401(k) is a retirement account with defined contributions that are usually employer-sponsored. A 401(k) lets employees designate a part of their salary to save for retirement in a tax-advantaged way. Funds are invested into a wide range of investment vehicles that can include stocks, bonds, mutual funds, etc.
How a 401(k) WorksHow do 401(k) plans work? The most basic way to explain how a 401(k) plan works is to think about it like a savings account. Similar to a savings account, you put money into it to save for your retirement. The money you put into a 401(k) is then invested into different investment vehicles of your choosing. You put in pre-tax funds directly from your paycheck. The money grows over time in line with the underlying investments. When you retire, you can then take out withdrawals or distributions to fund your retirement.
401(k) Planning BasicsTax-advantaged – Why not use a regular savings account to save for retirement? Because a 401(k) retirement plan is tax-advantaged. Everyone has to pay income taxes. 401(k) plans let you defer your income for a later time. Since you contribute to your 401(k) before paying taxes, you will ultimately pay fewer taxes in a given year when you make 401(k) contributions. Of course, you must pay taxes on this income in retirement, but most people have a lower income in retirement and could be in a lower tax bracket.403(b) and 457(b) – What’s the difference? These accounts are similar to a 401(k) plan. However, depending on the employer you have, you will be eligible for a specific type of retirement account based on what your employer offers. For example, non-profit companies provide 403(b) plans instead of 401(k) plans.401(k) Contribution Match – Some employers contribute matches up to a specific percentage or dollar amount for employees who contribute to their employer-sponsored 401(k) plans. This is a beautiful way to save for retirement. Your employer is essentially offering you free money. Why wouldn’t you take advantage of that?Investment Options – A 401(k) plan offers numerous investment options that you get to choose from. This gives you the power to decide essentially how your money will grow over time. As opposed to putting your funds in a traditional savings account, which the bank has control over, and growth rates are fixed and slow.Risk – It is essential to consider your risk tolerance when choosing investment vehicles for your 401(k) plan. If you are farther from retirement, you might have a higher tolerance for risk than someone within ten or fifteen years of retirement age.
How We Can HelpThere is so much information available. A lot of people talk about how they manage their retirement planning. However, there is no one-size-fits-all retirement planning solution. A financial advisor will work with you to determine your individual goals and help you navigate the sometimes complicated world of retirement planning. Financial advisors have years of experience and generally have proven methods to aid you in growing your assets and protecting them when you need them in retirement.
Key TakeawaysThe most important thing for you to remember is that you do not have to navigate your employer-sponsored 401(k) plan alone. A financial advisor has the experience needed to look at your retirement income goals and help you decide how best to allocate your 401(k) contributions to invest for your financial future. Whether you are already taking advantage of the use of your employer-sponsored 401(k) plan or not, contact a financial advisor at Heritage Solutions Group to make sure that you are making the most out of your retirement planning and are on the right track to obtain the kind of lifestyle you want for yourself in retirement.