Please advise me whether I understand this correctly:
The benefits of maxing out the 401k:
- Your contributions are tax-deductible, so it lowers your income during tax filling
- As your money grows over the years, your dividends on that money are not taxed
- Usually there is company matching.
- Your money is tied up until you retire
Let's say you're making $100k per year.I would imagine that it would be almost foolish to not max out your 401k?
(I am leaving out the Roth IRA out of this equation for simplicity purposes, and just want to discuss the 401k)
Am I understanding the full picture?