Today I took a bold step in retirement planning, Yes I opted for the 401(K) plan offered by my employer. I was reading through the plan documents, trying to understand the jargons. Added my wife as a primary beneficiary (100%) for the returns.

Though I am starting this baby step/investment with a small contribution, you are also getting your employer contribution towards this plan. This is very good thing, similar to our Employee Provident Fund (EPF) in India.

Also I learnt the differences between the Traditional 401(K) plan and ROTH schemes. In ROTH schemes, the final lump sum you will get is not taxable. In Traditional schemes, your contribution to 401 (K) is pretax and the final lump sum is taxable. Dont know which one is best, still do need to analyze it. For Now, I am happy that I took this baby step towards retirement planning since I already turned 30.

The bad thing is, not utilizing such provisions. I should have used this provision 2 yrs back, By now I will have considerable savings for my retirement if I acted earlier.

Of course, you can take loans from 401 (k) plans if you are badly in need of money too.

Happy learning and investing! Wish you all Healthy, Happy N Prosperous 2014!!