401(k) plan: Difference between revisions
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imported>Doug Williamson (Mend links.) |
imported>Doug Williamson (Create page. Sources: linked pages and IRS webpage https://www.irs.gov/retirement-plans/plan-participant-employee/definitions) |
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The term 401(k) refers to subsection 401(k) of the US Internal Revenue Code. | The term 401(k) refers to subsection 401(k) of the US Internal Revenue Code. | ||
A 401(k) pension plan is a defined contribution plan where an employee can make contributions from their salary. | A 401(k) pension plan is a defined contribution plan where an employee can make contributions from their salary. | ||
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The contributions go into a tax-advantaged 401(k) account, with the employee often choosing the investments based on options provided under the plan. | The contributions go into a tax-advantaged 401(k) account, with the employee often choosing the investments based on options provided under the plan. | ||
In some plans, the employer also makes contributions such as matching the employee’s contributions up to a certain percentage. Some 401(k) plans have mandatory employer contributions. | In some plans, the employer also makes voluntary contributions such as matching the employee’s contributions up to a certain percentage. Some 401(k) plans have mandatory employer contributions. | ||
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* [[Defined contribution pension scheme]] | * [[Defined contribution pension scheme]] | ||
* [[Internal Revenue Service]] | * [[Internal Revenue Service]] | ||
* [[Longevity Annuity]] | |||
* [[Occupational pension scheme]] | * [[Occupational pension scheme]] | ||
* [[Qualified Longevity Annuity Contract]] | |||
* [[Required Minimum Distribution]] | |||
* [[Stakeholder pension scheme]] | * [[Stakeholder pension scheme]] | ||
* [[United States]] | * [[United States]] | ||
Revision as of 00:12, 20 April 2020
Pensions - defined contribution - US.
The term 401(k) refers to subsection 401(k) of the US Internal Revenue Code.
A 401(k) pension plan is a defined contribution plan where an employee can make contributions from their salary.
The contributions go into a tax-advantaged 401(k) account, with the employee often choosing the investments based on options provided under the plan.
In some plans, the employer also makes voluntary contributions such as matching the employee’s contributions up to a certain percentage. Some 401(k) plans have mandatory employer contributions.
