If the parents contribute all $14,000 to the 401k Plan for the next 18 years They will take full advantage of the employer’s match of 25 cents on the dollar — a guaranteed 25% return on your money, plus a minimum of $10,800 tax saving.
When college comes along, take a early withdrawal from the 401k loan to pay the education expenses is tax-free. You’ll have 60 months to repay each early withdrawal back and you pay interest to yourself.
- 401(k) balances below high of six years ago
Despite strong investment gains during the past three years, employees' 401(k) account balances, on average, are lower than they were six years ago as the accounts have yet to fully recover from the beating...