Interesting seeing the difference between American 401k vs Australian Superannuation. In Australia contributions are taxed at 15% which is usually much lower than your income tax bracket so putting money into your super not only reduces your income tax, but the contributions also are tax effective. When you take out your super in retirement you only need to pay capital gains tax. There are no waiting periods so payments are instant and employers by law must contribute 11% (will be 12% in 2025) of an employee's gross income into their super account. Employees can also salary sacrifice into their super up to a limit of $27,500 (or $110k after tax contributions). Biggest drawback for us Aussie is we can't touch our super until we are 67 year old (which seems to keep increasing)
No it's not well explained... Isn't that money invested in the stock market???? It's not just a savings account right???? And she didn't mention **vesting... Back in the 90s when I worked in a warehouse you had to be *vested in order to get 100% of the money back.. that was a year threshold like 5 years or 10 years before you were said to be fully vested* 😢
Hi Marcus, thank you for your comment. You are right that we should cover vesting, so I have added that in for a future FAQ that will then be linked to this episode. And to answer your question, 401(k)s are not invested in the stock market automatically, but some platforms, such as Ubiquity, do make it easier for people to see how the account grows with regular contributions. I recommend reaching out to an advisor, who can use the money invested in your 401(k) to invest in stocks.
So, you take a proportion of my wages and withhold it from me, not reducing any tax due because it gets taxed at the end, and if I want to take my money back any time you rob me of 10%? That doesnt seem a very good deal to me, why can I not receive my whole salary and do as I wish with my own money? And if the employer thinks I am worth a few more dollars, why can I not get that employer contribution paid to myself? If I die before 60 I lose the lot, I'd rather have it all while still young enough to enjoy it. Or invest it myself, up to me. Government ponzi scheme, give me my money.
Interesting seeing the difference between American 401k vs Australian Superannuation. In Australia contributions are taxed at 15% which is usually much lower than your income tax bracket so putting money into your super not only reduces your income tax, but the contributions also are tax effective. When you take out your super in retirement you only need to pay capital gains tax. There are no waiting periods so payments are instant and employers by law must contribute 11% (will be 12% in 2025) of an employee's gross income into their super account. Employees can also salary sacrifice into their super up to a limit of $27,500 (or $110k after tax contributions). Biggest drawback for us Aussie is we can't touch our super until we are 67 year old (which seems to keep increasing)
Thanks for the video. Well explained without ambiguity.
Thanks for watching!
No it's not well explained... Isn't that money invested in the stock market???? It's not just a savings account right???? And she didn't mention **vesting... Back in the 90s when I worked in a warehouse you had to be *vested in order to get 100% of the money back.. that was a year threshold like 5 years or 10 years before you were said to be fully vested* 😢
Hi Marcus, thank you for your comment. You are right that we should cover vesting, so I have added that in for a future FAQ that will then be linked to this episode.
And to answer your question, 401(k)s are not invested in the stock market automatically, but some platforms, such as Ubiquity, do make it easier for people to see how the account grows with regular contributions. I recommend reaching out to an advisor, who can use the money invested in your 401(k) to invest in stocks.
Isn't it similar to epfo except tax benefits
So, you take a proportion of my wages and withhold it from me, not reducing any tax due because it gets taxed at the end, and if I want to take my money back any time you rob me of 10%? That doesnt seem a very good deal to me, why can I not receive my whole salary and do as I wish with my own money? And if the employer thinks I am worth a few more dollars, why can I not get that employer contribution paid to myself? If I die before 60 I lose the lot, I'd rather have it all while still young enough to enjoy it. Or invest it myself, up to me. Government ponzi scheme, give me my money.