Would an 801k plan be taxed the same as any other investment?

Do you mean 401k plan? no. It is taxed at the regular tax rate when you withdraw the money. Until then it is not taxed. Many other investments are subject to a capital gains rate, which is about 1/2 the regular rate. Or do you mean drip plan which somehow got that cognomin. Drip plans are taxed currently at the dividend tax rate for most. Some are taxed at the full tax rate--REITS and LPs for example. The tax is on the amount of the dividend reinvested, so you will be taxed on money you do not see.

O, yeah

An 801K Plan is a fancy technical term for a DRIP Plan. They are taxed on dividends paid out. You will have to double check, but I believe the tax rate on dividends reinvested is lower than the standard capital gains tax. Check on that, for I am not 100% sure.

There have been several advertisements lately pushing the power of 801k Plans. They do not call them what they arer, DRIP Plans, because if a reader does a little research and discovers DRIP are very inexpensive to open and maintain, the Financial Newsletter who is "teasing" the 801k Plan will not get you to subscribe.

DRIP's are not known about by most investors because brokers don't like to suggest them. The commission rates are very low.

Do some research on them, they are very effective investment vehicles.

Good Luck

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