When $1 Million in a 401(k) Is Really $600,000
That $1 million in your 401(k) account looks mighty good. It's more than you've ever had in your life, and that money will fund your retirement. But it's not quite yours. Your retirement account is tax-deferred, not tax-free. And Uncle Sam hasn't been paid yet.
"Some people have this notion that when they retire, they don't have to pay taxes," says Nicolas Abrams, president of AJW Financial Partners in Baltimore. "I don't know who started that rumor, but I have to dispel that myth."
Rodney Brooks
An award-winning journalist, writer and author and my specialty is retirement planning and other personal finance issues. I have written for many national publications, including USA TODAY, The Washington Post, U.S. News & World Report, AARP and National Geographic. I am available to speak on personal finance, financial literacy and the racial wealth gap.
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The author tells the history of the Freedman’s Savings Bank, how it grew much too quickly, why it failed and the impact on Black America. The Freedman’s Bank offered a safe depository for formerly enslaved people, expanded quickly and gained millions in deposits – mostly ranging from $5 to $50. But inexperience and corruption doomed it to failure, costing may of the small depositors their savings.
