From which bank account should I make employee contributions to my Self-Employed (Solo) 401k?

What is a 401k and how does it work?

A 401(k) is a retirement savings and investing plan that employers offer. A 401(k) plan gives employees a tax break on money they contribute. Contributions are automatically withdrawn from employee paychecks and invested in funds of the employee’s choosing (from a list of available offerings).

What is the benefit of having 401k?

Tax-Deferred Earnings When you contribute a percentage of your pay to a 401(k) plan, you immediately start paying less to Uncle Sam. That’s because your contribution comes out of your paycheck before income taxes are deducted. That means your taxable income is less, which in turn lowers your tax bill.

What is a 401k in Canada?

What is the equivalent of a 401(k) in Canada? The Registered Retirement Savings Plan is a tax-deferred retirement plan that is analogous to the traditional IRA in the United States. Each year, individual Canadians can contribute funds to their RRSP account up to a maximum limit.