A 401(k) is a common retirement savings fund that employers can offer to their staff. This guide provides some basic information about different types of 401(k) accounts, how those accounts are funded, and some of the rules regarding how your 401(k) funds can be used.
A 401(k) is a retirement savings plan funded by pre-tax deductions from a worker's paycheck. Learn more
Traditional 401(k) Contributions are made before taxes are paid, also known as pre-tax contributions or tax-deferred. When a worker receives their W-2, their earned income ... Learn more
This page contains a list of helpful terms related to a 401( k ). 401( k ): A defined contribution retirement plan offered through employers. Traditional contributions fo... Learn more
How much can I contribute to my 401(k)?
The IRS places two types of limits on annual contributions to employees' 401( k ): limits on contributions by employees alone, and limits on the combined contributions (employee... Learn more
What are matching contributions for 401(k)s?
A matching contribution occurs when a company matches their workers' 401(k) contributions. This means the employer will put funds into to their workers' 401(k) accounts based on... Learn more
How do taxes affect 401(k) contributions?
Employee contributions to a 401(k) are tax-deferred, not tax-free. Employee contributions are pre-tax deductions that reduce taxable income. Funds in a 401(k) accumulat... Learn more
Can I make early withdrawals from my 401(k) account?
Virtually all employers impose severe restrictions on withdrawals of pre-tax or Roth contributions while a person remains employed with the company and is under the age of ... Learn more
Eligibility for 401(k) participation will vary by company. When establishing or renewing their 401(k) plan, a company sets their eligibility requirements for who can enroll in t... Learn more
What are the tax benefits of a 401(k)?
Since 401(k) contributions are pre-tax, the deductions are taken from a worker's gross earnings before taxes are calculated for those earnings. The worker's taxable wages are re... Learn more
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