401(K) Plan
A deferred compensation retirement savings arrangement in which employers withhold a portion of their employees' pretax wages and invest them in a plan where they may earn income, tax-free, until the employee withdraws the money. Some employers also contribute to their employees' 401(k) plan, often through matching employee contributions, at least up to a certain amount. Because a 401(k) is a retirement plan, employees must pay a penalty for early withdrawals, although some plans allow employees to borrow money from their plans without penalty for certain expenses.
Nolo. (Reviewed 2024). 401(K) Plan Retrieved 1/30/2024 from Nolo.
More about this Topics
-
Social Security: Checking Your Earnings and Benefits
-
How Beneficiaries Can Claim Life Insurance and Social Security Benefits
-
ERISA Disability Benefits Applications: 6 Common Mistakes
-
Getting Your Retirement Money Early Without Penalty
-
Social Security Disability: Deciding Whether to Appeal a Denied Claim