25 Changes to Your 401(K) Plan That Can Save Your Retirement

Maximize Your Tax Benefits

This is one of those things that you should ask a financial adviser for help with! But, long story short, you have to maximize your tax benefits. That’s because your withdrawals will be taxed as ordinary income, meaning that you’ll pay taxes on withdrawals as you would pay taxes on normal wages.

It’s important to emphasize income-gathering investments such as bonds over capital gains.

Here’s why! When you invest in stocks in a taxable investment account and hole them for at least one year, you’ll normally only pay between 0% and 15% on those gains. 401(k) plans are different and you could end up paying much more, depending on your tax bracket!

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