401(k) Retirement Plans
401(K) plans are tax-deferred retirement savings plans for employees. The employer sets this up and as a result, each company has a slightly different plan. 401(k) plans are part of a family of retirement plans known as "defined contribution" plans - the amount contributed is defined by the employer or the employee.
Employees may elect how much they want to contribute to the 401(k) plan and those amounts are taken on a "per pay period" basis. This amount is deducted from the employees' salary before taxes are applied, so you and your employees pay less tax. For employees, this is the easiest way to save for retirement since money is deducted before they even receive it. As the employer, you may match a portion of your employee's contribution. Funds are invested by the plan administrator (on behalf of participants) in mutual funds, bonds, money market accounts, etc. Each employee decides the mix of investments. The 401(k) provider will have a list of investment vehicles they can choose from as well as some guidelines for the level of risk they are willing to take. Since the plan is an incentive for retirement savings, there is one condition: if an employee withdraws the money before the age 59½ years old, they will have to pay tax as well as a 10% penalty fine to the IRS.
401(k) Retirement Plans Quote Request
Please take a moment to fill out the form below and one of our local insurance agents will contact you to provide a free, no-obligation quote. This information will be kept confidential and will be used for quote purposes only.
* Required fields.
