Greene Concepts Inc (INKW)

[Garyst]

Hi UD. Like CEO said a 401k here in the States is basically a retirement plan which your employer offers. Prob something up there comparable. Here is how it works. Many employers will offer a "Match" if you decide to contribute to it each paycheck. Most employers will "Match" your contribution say at .50 cents on the dollar or even some at .75 cents up to a certain percent which is usually 5-8 percent of your contribution. It is all pre tax dollars. In my case for example being a Federal employee I contribute 8 percent of my biweekly paycheck. Lets say that is $4000.00. That would be $320.00 of my earnings taken off the top of my paycheck to be deposited into my 401k. Then the employer matches your contribution at a 50 percent rate throwing in another $160.00 into your 401k. Basically each pay period you are making a 50 percent return on you money that you elect to contribute. Anything above your employers "match" is at your discretion but still pre tax. Say you make $100,000.00 a year and your contribution to your 401k was $15,000.00 during the year your year end taxable income would only be $85,000.00 as you are not taxed on the portion which was taken out pre tax. On the flip side, we will pay taxes in the long run on the money when we retire and take increments out. Make sense? Bottom line: It is always to anyones best interest here to always contribute to the extent that their employer will "Match" their contribution as it is a 50 percent gain every pay period on your money that you contribute.