Is 401K Plan A Retirement Plan?

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June 3, 2013

Larry Gilmore

Is a 401(k) a retirement plan? Yes, a 401(k) is a retirement plan that has grown in use since the early 1980’s when they were created. Originally, 401(k) plans were meant to supplement traditional pension plans that had been offered by employers. Over the years, that idea has changed 401(k)s from supplemental to primary retirement plans for many employers. A 401(k) is a defined contribution style plan. That means your employer provides the plan and possible contributions to it, but the employee is responsible for the outcome of their plan.
June 2, 2013

David Racich

A 401K Plan a Retirement Plan is an ERISA sanctioned qualified plan that allows pretax contributions into this employer sponsored retirement plan. For 2013 contributions you can contribute up to $17,500 and if you’re over age 50 you can contribute up to $23,000. Keep in mind that some employers match your contribution to some degree, so it may be something to consider.

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