Of all the wealth creation techniques 401k investing is probably the best ride.
Example: To make mental math calculations simple – say you make a contribution of $20,000 this year to your 401k. (For workers age 50 the maximum contribution allowed by IRS is $26,000 – workers under 50 have a contribution limit of $19,500)
Tax rebate for the Employee amounts to $4,400
Calculate the ROI based on the 401k contribution by the worker.
Thus the ROI is $4,400 percentaged on $15,6oo = 28.2%
How does that ROI *(a guaranteed return) compare to speculative investments?
Now Grade up a notch:
For zero cost an employer will be able to make a matching contribution to the employees. At that point, subject to a few compliance parameters, the Employee is then able to use half of the value in their 401k (up to $100,000 – previously restricted to $50,000) to pay down the $20,000 borrowed externally to make their own 401k contribution.