When you sign a contract with your
employer a certain portion of your income or salary (without tax) is
deducted and deposited in another account or invested separately, which
would be with the employer, for your retirement purpose. This is known
as 401k retirement plan. It is the agreement between the employer and
the employee. The employee can receive this money after his retirement,
by that time the money would be increased for your investment interest
and employer’s contribution. This plan is gaining popularity for its
terms and conditions, which are flexible with the employees and
affordable for the employers.
A 401k plan is considered as retirement
saving, which grows tax-free until they are withdrawn. These plans are
named after the section of the Internal Revenue Code (1978), under IRC
rule the 401k operates. This plan proved to be beneficial for the
employer as he can predict the cost of the plan. Implementing this makes
the employer relieved from using the pension plans.
When you will leave the company, 401k
retirement plan remains active for your rest of your life with the
ex-employer. If the company charges a fee for leaving your account with
them you can rollover 401k benefits into an Individual Retirement
Account. Or you can opt for transferring it to your present company’s
401k retirement plan. The amount from 401k retirement plan can be drawn
only after the age of 59 ½ with a payable tax. It is advised to take
this plan to get a surplus amount of money for your golden years.
The Retirement Group help desk will take all your queries for 401k retirement plan and give solution to it. Feel free to call at 800-900-5867
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