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In the United States of America, a 401(k) retirement savings plan allows a worker to save for retirement and have the savings invested while deferring current income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wages paid directly, or "deferred," into his or her 401(k) account. This deferment is also known as a "contribution." 401(k) plans are mainly employer sponsored plans; the employer can, as a benefit to the employee, optionally choose to "match" part or all of the employee's contribution by depositing additional amounts in the employee's 401(k) account or simply offer a profit sharing contribution to the plan. In participant-directed plans (the most common option), the employee can select from a number of investment options, usually an assortment of mutual funds that emphasize stocks, bonds, money market investments, or some mix of the above. Many companies' 401(k) plans also offer the option to purchase the company's stock. The employee can generally re-allocate money among these investment choices at any time. In the less common trustee-directed 401(k) plans, the employer appoints trustees who decide how the plan's assets will be invested. The title "401(k)" references 26 U.S.C. § 401(k), a section of the Internal Revenue Code. Some assets in 401(k) plans are tax deferred. Before the January 1, 2006, effective date of the designated Roth account provisions, all 401(k) contributions were on a pre-tax basis (i.e., no income tax is withheld on the income in the year it is contributed), and the contributions and growth on them are not taxed until the money is withdrawn. With the enactment of the Roth provisions, participants in 401(k) plans that have the proper amendments can allocate some or all of their contributions to a separate designated Roth account, commonly known as a Roth 401(k). Qualified distributions from a designated Roth account are tax free, while contributions to them are on an after-tax basis (i.e., income tax is paid or withheld on the income in the year contributed). In addition to Roth and pre-tax contributions, some participants may have after-tax contributions in their 401(k) accounts. The after-tax contributions are treated as after-tax basis and may be withdrawn without tax. The growth on after-tax amounts not in a designated Roth account is taxed as ordinary income. From Wikipedia under the
GNU Free Documentation License What are the differences and similarities between a 401K in the US and a regulated superannuation Fund in Aus? Q. I see many questions on here regarding 401K's which i assume are available in the United States. They sound quite similar to Regulated Complying Superannuation Funds in Australia. I have worked in the Superannuation industry in Australia so I understand in detail how Australian super funds work and the rules relating to them. I am specifically looking for information on how a 401K works and, if anybody knows about both superannuation funds and 401K's, what the similarities/differences are. If you only know about 401K's then please put down what you know and I will be able to work out the differences and similarities. My understanding is that 401K's are retirement savings accounts which are preserved until age 62 except in certain… [cont.] Asked by Richard D - Tue Jan 30 08:11:14 2007 - - 2 Answers - 0 Comments A. Since I spend time in both countries during each year, I can give your info, but from a layman's point of view. The 401 Ks are similar to super funds. The differences are that in the 401K 1) It is not compulsory for employers to contribute. It is also not compulsory for employees to contribute, although they have to realize that their retirement is their own responsibility. 2) Many employers only match the contribution that their employee puts aside, in many cases up to 6% to 10% of the employee's base income. 2) Insurance is only available at the employees expense and if the employee chooses to insure his/her income. 3) 401Ks are sort of like a form of savings. You contribute funds into your 401K account, sort of like dollar… [cont.] Answered by Muga Wa Kabbz - Tue Jan 30 08:46:52 2007 How much is taxed when you take money out of your 401k? Q. I recently got divorced. I have to sign over 1/2 of my 401k to her. I am thinking of asking her to buy her out less any taxes she would have been charged. What percentage is taken out of a 401k when removed. I am trying to think of an offer to give her. The 401k is not alot. (24,000) She gets 12k. Any Ideas? Asked by kydadoflouisville - Tue Aug 8 10:25:30 2006 - - 6 Answers - 0 Comments A. Before I give advice, I was wondering if you have a QDRO (qualified domestic relations order) in place. If so, you may already have some protection from tax implications on this. Check with your attorney to see if he set up the QDRO. Also, it seems to me that it could be possible to handle this an entirely different way. Since the main idea is to divide your assets in half, couldn't the decree have been set up such that you would retain 100% interest in the 401(k) and she would receive cash? It seems like kind of sloppy planning to have either of you end up with tax implications from this. Some states have certain laws that preclude this sort of thing, but check with your attorney to see if it's too late for the QDRO or dividing the assets… [cont.] Answered by SuzeY - Tue Aug 8 23:01:43 2006 Who should I go to rollover a 401K into a growth stock mutual fund?
Q. I am looking for an agency to take my 401K to but unsure of where to start but I know I want to put it into a growth stock mutual fund. Should I withdraw my funds first or contact (insert name here)? Thanks! Asked by Angela C - Mon Feb 4 16:42:38 2008 - - 3 Answers - 0 Comments A. If your money is in a company sponsored 401(k), then you should have access to a growth stock mutual fund. Just ask you sponsor to buy a growth fund. Answered by William H - Mon Feb 4 17:22:34 2008 From Yahoo Answer Search: "401k" From Wikiquote under the GNU Free Documentation License. See also:
 news.google.com KBTX Benefits include health plan with optional insurance such as cancer insurance, vision and dental insurance; life insurance; 401K ; paid days off (PDO) ... and more » news.google.com CFODailyNews.com A deadly incident of workplace violence is every employer's greatest fear. This particular case may have a link to the company's finance department. ... news.google.com Blast And two days after the big downsizing, her 401k , which was her stock in that company, went up, and she thought it was maybe her opportunity to retire early. ... All's Wells Boston Herald all 2 news articles » From Google News Search: "401k" From Yahoo Image Search: "401k"  financialstrategiestoday.com GuestPoster Fri, 29 Jan 2010 21:06:18 GM If you are considering self-employment but you are wondering about how to save for retirement, don't worry there is an individual . 401k. plan for you. It is.  kivitv.com unknown Mon, 25 Jan 2010 20:28:00 GM If you are putting a percentage of your salary into your . 401k. plan, then as you make more money your contributions to your plan increase. When you contribute more, you have the potential to accumulate more. ...  jessescrossroadscafe.blogspot.com (Jesse) Sat, 09 Jan 2010 01:57:00 GM For some reason the Obama Administration is promoting the idea now that there should be some encouragement for Americans to start converting their . 401K's. and IRA's into annuities, to provide themselves with lifetime income. ... From Google Blog Search: "401k" |
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