is it an investesment plan, retirement plan, etc? I hear so many people mention it but not what it really is.
2007-10-24 04:54:12 · 4 answers · asked by porfelia 1 in Business & Finance ➔ Personal Finance
It is an employer sponsored, tax deferred retirement plan. You put the money in pre-tax. It grows. When withdrawn it is treated as ordinary income. You can't start withdrawing without penalty until you are 59 1/2. You have to start withdrawing by age 70 1/2.
It is called a 401(k) plan because that was the section of the law that authorized the creation of the plans.
good luck!
2007-10-24 10:04:35 · answer #1 · answered by Rush is a band 7 · 0⤊ 0⤋
It is a retirement plan that is based on working for a corporation.
If you want to start a retirement plan outside of work look at IRAs
2007-10-24 04:57:46 · answer #2 · answered by Greg S 5 · 1⤊ 0⤋
Go to www.401k.org. It explains 401(k) plans.
2007-10-24 06:21:31 · answer #3 · answered by Anonymous · 0⤊ 0⤋
retirement savings account from who you work for.
they will match part of what you contribute after you are vested in
if you are young TAKE ADVANTAGE OF THIS !!!
contribute as much as you're allowed out of each paycheck.
you will be GLAD YOU DID !!!!!!!!!
2007-10-24 05:03:45 · answer #4 · answered by Amanda H 5 · 0⤊ 0⤋