401(k) Plan

Dictionary Says

Definition of '401(k) Plan'

A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.
Investopedia Says

Investopedia explains '401(k) Plan'

Caps placed by the plan and/or IRS regulations usually limit the percentage of salary deferral contributions. There are also restrictions on how and when employees can withdraw these assets, and penalties may apply if the amount is withdrawn while an employee is under the retirement age as defined by the plan. Plans that allow participants to direct their own investments provide a core group of investment products from which participants may choose. Otherwise, professionals hired by the employer direct and manage the employees' investments.

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Related Definitions

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Articles Of Interest

  1. 401(k) Debit Cards: Taking A Swipe At Your Retirement Savings

    This is just another more convenient way to borrow from your plan. But at what cost?
  2. Pick 401(k) Assets Like A Pro

    Professionals choose the options available to you in your plan, making your decisions easier.
  3. 401(k) Predators: Don't Become Prey

    Be leery of "free" financial education sessions - the providers may not be working in your best interest.
  4. A Closer Look At The Roth 401(k)

    Learn about the benefits and drawbacks of this new investment account and see if it's right for you.
  5. Bear Spray For Your 401(k)

    You can defend your retirement savings from the ravages of a bear market. We'll show you how.
  6. Top 403(b) Questions Answered

    This plan doesn't get as much attention as its more popular cousin - the 401(k) - but it has a lot of benefits for eligible investors.
  7. The 401(k) Investor: A Retirement Plan That Works

    "Save as much as I can" isn't going to cut it. You need an effective approach to make sure your retirement nest egg doesn't fall short.
  8. The 4-1-1 On 401(k)s

    This plan has become one of the most popular retirement options. Find out why.
  9. 6 Problems With 401k Plans

    If you pay attention to the problems here, you will be able to avoid the negative effects and meet your retirement goals.
  10. Is Your 401(k) On Track?

    Small adjustments can have a significant impact on your returns. Learn what to watch for.

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