801(k) Plans

Most everyone has heard of a 401(k) plan even if they do not know what it is.  Have you heard of an 801(k) plan though?  Most people have not heard of it, but they should.  Some experts feel that these plans can be much better than the traditional 401(k) plans.  Before choosing one over the other you should understand what an 801(k) is and know what the differences are between and 801(k) plan and a 401(k) plan.

Unlike a 401(k) plan, an 801(k) plan is taxable.  That is not the only difference though, with an 801(k) plan there is no option for an employer to match the contributions that you put in it.  Having an 801(k) plan allows the investor to buy shares of stock directly from the companies they want to buy from.  This eliminates the need for a stock broker which will save you money in fees.

What you need to do is to determine the stability of the stocks that you want to invest in.  One thing that is incredibly important is to understand the fundamentals of the company you are looking to invest in.  You are not using a stock broker so you do not have them there to ask questions or to talk to.  This means it is so much more important that you understand the fundamentals of any company you are looking to invest in.

An 801(k) plan is much different from a 401(k) plan.  While one might be better for some people, the other might be better for others. How do you know which is best for you?  Do research, which sounds better to you?  Which sounds like the best option for you?  You need to think about all of that and take it into consideration when trying to decide which plan is best for you.  If you need help you always have the option of going to talk to a financial advisor.  They will be able to answer any question you have and get you on the right savings plan.


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