2006-10-24 06:05:38 · 5 answers · asked by meishajax 1 in Business & Finance ➔ Personal Finance
There are some good answers here, but there is a bit more to a 401(k). it would be helpful if we know exactly what type of info you are looking for.
With a 401(k) you can also take a loan from it (which you are basically paying back to your own account), you may take withdrawals prior to age 59 1/2 , but they withhold 20% for federal tax purposes, then when you file your tax return (prior to April 15) you will pay a 10% penalty fee.
2006-10-24 07:09:20 · answer #1 · answered by tweetymay 6 · 0⤊ 0⤋
In a traditional 401K plan, employees contribute money before tax to the 401K plan. For example, an employee earning $60,000 per year and contributing the maximum permissible $14,000 in 2005 to a 401K would pay federal and state income taxes only on $46,000. The money invested in the 401K plan will grow and will be taxed as regular income when taken out at age 59.5 years or older.
2006-10-24 13:14:04 · answer #2 · answered by Anonymous · 2⤊ 0⤋
Its basically a retirement savings program offered through your workplace. You usually cant tap into it until you retire and if you do take some money out of it you will be penalized some. Either a percentage will be taken out in taxes or you will have to pay yourself back with interest.. like a loan.
2006-10-24 13:10:46 · answer #3 · answered by yournotalone 6 · 0⤊ 0⤋
All i know is that its sum retirement plan in the US. Chek wikipedia out, u prolly get ur best answer there. Good Luck.
2006-10-24 13:09:46 · answer #4 · answered by NightSlayer 3 · 0⤊ 0⤋
its sum retirement plan in the US. Chek wikipedia out, u prolly get ur best answer there. Good Luck.
2006-10-24 13:14:02 · answer #5 · answered by rickalgo 1 · 0⤊ 0⤋