401(k) And Qualified Plans: Conclusion
AAA
  1. 401(k) And Qualified Plans: Introduction
  2. 401(k) And Qualified Plans: Types Of Plans
  3. 401(k) And Qualified Plans: Eligibility Requirements
  4. 401(k) And Qualified Plans: Contributions
  5. 401(k) And Qualified Plans: Distributions
  6. 401(k) And Qualified Plans: Conclusion
401(k) And Qualified Plans: Conclusion

401(k) And Qualified Plans: Conclusion

By Denise Appleby

A qualified plan is established by an employer to provide retirement benefits for employees and their beneficiaries. Qualified plans can come in a few different flavors. Let's recap:

  • A qualified plan may be a defined-benefit plan or a defined-contribution plan.
  • Retirement benefits are based on compensation, years of service and age for defined benefit plans
  • Varieties of qualified plans include profit-sharing or stock-bonus plans, money-purchase pension plans, 401(k) plans, age-weighted plans and employee stock ownership plans (ESOPs).
  • Any business, including sole proprietorships, partnerships, corporations and government entities may adopt a qualified plan.
  • A qualified plan may be funded with employer contributions and employee contributions, depending on the type of plan.
  • Employee compensation in excess of the compensation cap may not be considered for the purposes of making plan contributions.
  • An employer may contribute up to 25% of compensation to each eligible employee's account provided the contribution does not exceed $51,000.
  • Distributions before an employee reaches the age of 59.5 are taxed an additional 10%, unless the employee qualifies for an exception.

  1. 401(k) And Qualified Plans: Introduction
  2. 401(k) And Qualified Plans: Types Of Plans
  3. 401(k) And Qualified Plans: Eligibility Requirements
  4. 401(k) And Qualified Plans: Contributions
  5. 401(k) And Qualified Plans: Distributions
  6. 401(k) And Qualified Plans: Conclusion
401(k) And Qualified Plans: Conclusion
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  3. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  4. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  5. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  6. MyRA

    A new tax-advantaged retirement account that President Barack ...
  1. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ...
  2. How does a qualified retirement plan early distribution work?

    Weigh the pros and cons of taking an early distribution from a retirement account. Most early distributions are subject to ...
  3. What are the Roth 401(k) withdrawal rules?

    Understand the requirements for tax-free withdrawal from a Roth 401(k) account, how early withdrawals are taxed and options ...
  4. What are the main differences between a Roth 401(k) and a 401(k)?

    Learn more about financial planning, investment options and decision making between traditional 401(k) and Roth 401(k) accounts, ...
comments powered by Disqus
Related Tutorials
  1. Consolidating Your Retirement Money
    Retirement

    Consolidating Your Retirement Money

  2. Analyzing The Best Retirement Plans And Investment Options
    Retirement

    Analyzing The Best Retirement Plans And Investment Options

  3. The Complete Guide To Retirement Planning For 40-Somethings
    Budgeting

    The Complete Guide To Retirement Planning For 40-Somethings

  4. The Complete Guide To Retirement Planning For 50-Somethings
    Retirement

    The Complete Guide To Retirement Planning For 50-Somethings

  5. The Complete Guide To Retirement Planning For 30-Somethings
    Taxes

    The Complete Guide To Retirement Planning For 30-Somethings

Trading Center