Economics - Starting a new job

What are Pre-Tax Deductions and Contributions?

Contributions taken out of your paycheck BEFORE taxes are calculated on your income

If the company you work for offers 401(k) matching, what does the matching refer to?

For every dollar you invest in the plan, your employer also contributes money to the plan

What is the difference between gross pay and net pay?

Gross pay is before taxes and deductions are subtracted; Net pay is your take-home pay.

What are two examples of Employer Contributions?

Health Insurance & 401k

Each of the following is a common paycheck deduction EXCEPT...

Health insurance premium

What advantages does a 401(k) plan have over saving for retirement yourself in your bank account?

The advantage that a 401k plan has over saving for retirement in your bank account is growth

If LeBron signs up for direct deposit with his employer, what will happen to his paychecks?

The money is electronically transferred directly to his bank account

Describe what a vesting period is. Why do you think companies would include a vesting period on employees' 401(k) plans?

Vesting period is the time of them holding your money

When do you pay taxes on money invested into a 401(k)?

When you take it out of retirement

If withholding taxes reduces the amount of take-home pay you receive, why wouldn't you just complete the W-4 so that you minimize your tax withholdings and maximize your paycheck?

You could lie, however, the government will be able to tell you're lying to the huge disparity between how much you're making and how much taxes you paid

Who would you say determines how much to withhold from your paycheck -- you or your employer?

You determine how much to withhold from your paycheck with the W-4