401(k) Plan

What does it mean?
A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post and/or pre-tax basis. Employers may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit sharing feature to the plan. Earnings accrue on a tax-deferred basis.

In Other Words...
Caps placed by regulations and/or the plan usually limit the percentage of salary deferral contributions. There are restrictions on how and when you can withdraw these assets, and penalties may apply if the amount is withdrawn while you are under age 59. Plans that allow participants to direct their own investments provide a core group of investment products that participants may choose from. Otherwise, professionals hired by the employer direct investments.

Related Links
Sorry, there are no related links.

Related Terms
403b Plan | 457 Plan | ERISA | Mutual Fund | Pension Plan | Qualified Retirement Plan | Salary Reduction Contribution

1 | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z