Additional Voluntary Contribution - AVC

  

Paying Peter now so that Paul pays you more later. Additional voluntary contributions are additions you can make to your employer retirement fund. The wise owl will make, at minimum, contributions equal to the amount that will be matched by the employer, if a lucky wise owl has that option. Additional voluntary contributions can be made to the fund above and beyond the employer matching allowance. Doing so would make you a super wise owl, but only if the contributions are tax deferred and you are in a higher tax bracket than you will be during retirement. Otherwise, Paul wins.

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Finance: What is a 401(k)?51 Views

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Finance a la shmoop... what is a 401k plan? okay say it with me tax deferred savings

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that's it it's really not all that complex for the fancy numbers there all [Complex formula scribbles]

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right well when you make money at work you get to defer the tax that you'll pay

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on your income or earnings to be paid much later in life and you get to invest

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realize that Social Security wasn't all that secure and that a whole generation

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of people who had paid money into Social Security wouldn't get anything back so [People protesting outside the white house]

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wealthier masses to save money for their retirement and this was a new idea at

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the time a whole new concept like a flying car before then it was mama [Man talking and flying car goes by a window]

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corporation who managed the pension money for her employees you know that

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workforce working away there toiling in the IBM salt mines for 35 years

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