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the amount of your contribution at anytime. The company encourages and supports your efforts by matching your contribution up to a certain per cent of your pay. You can arrange to distribute your contribution among three categories, i.e. pre-tax 401(k), Roth 401(k), and after-tax 401(k).

Pre-tax 401(k) is tax deferred. Roth 401(k) is not tax deferred but tax free including earnings when withdrawn in accordance with Roth IRA rules. After-tax 401(k) is not tax deferred but tax free not including the earnings when withdrawn at anytime in accordance with 401(k) rules. Money deposited in the 401(k) plan can be borrowed at a moderate rate of interest when you have no other alternative to borrow from. You try to keep the money in the plan to earn as much and as long as possible.

The 401(k) plan is intended for low paid employees but of course all employees within the salary limit are encouraged to join. For most members of the plan, the risk profile as investors is from conservative to moderate. Employees in the higher salary range are from moderate to aggressive depending upon how close they are to retirement. Generally, investment options offered are a Lifecycle Portfolio that caters to the conservative investor; Index Funds that caters to the moderate investor; and Active Funds that caters to the aggressive investor.

In any economic situation, no matter how much you earn or how much you can save, the 401(k) plan is always there for you.

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