Title: 401k Retirement Plan, Advantages and Benefits
1401k Retirement Plan, Advantages and Benefits
- By
- Financial Advisor California
- Dear 401K J
2What Is A 401 (K) Retirement Plan?
3401 (k) Is A Retirement Saving Plan Sponsored By
An Employer.
4Advantages And Benefits Of a 401 (k) Plan
5401 (k) Is A Retirement Saving Plan That Has Many
Advantages. But It Also Has Some Restrictions
6401k Plan Is Good To Go For All Types Of
Businesses Including
7S CORPORATION
C CORPORATION
8SELF EMPLOYED
PARTNERSIP
9SOLE PTOPRIETORSHIP
10Within Certain Guidelines, An Employer Is
Responsible For Setting Up The Eligibility
Requirements.
11An Employer Has The Power To Restrict 401k Plan
For Employees Such As
gt Less Than One Year Service gt Union Members gt
Non US Citizens gt Part-Time Workers gt ETC.
12 A 401k Contributions Can Come From Both Employee
And/or Employer Voluntary Salary Reduction.
13As Per 2014, Each Employee Eligible For A 401k
Plan Can Defer Up To 17,500 or 100 Of
compensation.
14Additional Catch-Up Contributions Of 5,500 Is
Allowed For 401k Participants Aged 50 And Over.
15Employees Are Immediately 100 Vested With Their
Own Salary Reduction Tax Deferred Contributions
1610 Penalty May Be Subject To Employee
Withdrawals Before Age 59
17Retirement Any Time During The Calendar Year In
Which An Employee Turn 55 Or Later Are Not
Subject To 10 Penalty
18Within Certain Guidelines, An Employee Can
Establish A Vesting Schedule For The Contribution
An Employer Makes To The 401k Plan.
19A 401k Plan Does Not Obligate An Employer To Make
Any Contributions To The Plan, Unless The Plan Is
Deemed Top Heavy.
20A 401k Plan Is Also Available In Internet And
Turnkey Forms.
21A 401k Plan Has Excellent Range Of Investment
Options Available, Sponsor To Offer Within The
Plan.
22An Average 401k Plan Has Up To 16 Investment
Choices/Options But May Range Up To 8 To 20
Options As Well.
23Self-Directed Investment Accounts And Company
Stock Purchase Are Permitted In 401k Plans With
Certain Terms and Conditions.
24Till There Is No Distribution From A 401k Plan,
No Federal Income Taxes Are Applied On Employee
Contributions To The Plan. Same Goes With All
Types Of Investment Gains And Earning.
25Hardship Withdrawals And Loans Are Permitted In A
401k Retirement Plan.
26During A Course Of Year, Participants Can Start
Or Stop Contributions To The Plan As Determined
By The Company.
27Contributions To A 401k Plan By An Employer May
Give Certain Tax Benefits To The Employer.
28Discrimination And Top Heavy Testing May Apply To
401k Plans.
29Typically, Contributions Of Other Employers Are
The Function Of The Amount That Owners And Highly
Compensated Individuals Can Contribute To A 401k
Plan.
30IRS 5500 Filings May Apply To 401k Plans
31Files 5500 reports with IRS, Accounting,
Participant Reporting, And Testing Are All
Performed By The Vendor Selected By The 401k Plan
Sponsor.
32Today, 401k retirement saving plan has proven to
be one of the most popular saving plans for
employees for many reasons. Some them include
increased profitability, employer matching
contributions, and the highest on the list is the
tax deferral.
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