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Chapter 1. What Is a 401(k)? > Why Should I Participate? - Pg. 11

What Is a 401(k)? 11 · Free money--Any time someone says he'll give you free money, take it; say, "Thank you"; and ask for more. Because many companies match their employees' 401(k) contributions, free money is there for the taking. · Reduce your taxes--Unless you are one of those Americans who believes in sending more tax money to Washington, dollar for dollar, a 401(k) is the best way to reduce your state and federal taxes. · Flexibility--No matter when or how your work situation changes, your 401(k) goes with you-- it's portable. · Choices--Planning for retirement is a matter of choices. The more money you save, the more choices you have. It's really simple. No savings--no choices. It's up to you. Those of us who qualify as baby boomers yearn for the day when we can take this job and do you- know-what with it. For us, that day is known as retirement. Younger people (that's probably just about everyone who's reading this book) may prefer the words financial independence, that point in time when you no longer have to work for a paycheck because you've saved enough money to support you and your family. Financial independence. It has a nice ring to it, doesn't it? Someone smart once said that the love of money is the root of all evil. We prefer George Bernard Shaw's version: Lack of money is the root of all evil. The Least You Need to Know · Because of 401(k)s, tens of millions of people will be able to retire and live the lifestyle they want. · 401(k)s are fast becoming the worker's most popular employee benefit, so it's a sure bet that you'll run into one sometime during your working career. Make sure that you know what they are and why you want one.