#1. What is a 401(k) plan?
A 401(k) plan is a retirement savings plan sponsored by an employer for its employees. The 401(k) plan arrangement allows an employee to choose between taking compensation in cash or deferring a percentage of it to a 401(k) retirement account which is usually not taxable to the employee until it is withdrawn or distributed from the plan.
How do 401(k) plans work?
Choosing the best retirement plans for individuals and for businesses is one of the most important financial decisions that can be made. 401(k) retirement plans have traditionally utilized the same basic approach for decades; employers provide a list of investment options to their employees which creates a confusing challenge for the majority of employees who are not investment savvy. They need additional 401(k) retirement plan resources, advice and a better retirement savings plan.
To learn more about a unique 401(k) retirement savings plan strategy and how to choose a 401(k) plan for your business and your employees contact one of our retirement plan consultants today.
Up Next in our Series: #2. How have 401(k) plans become inefficient?
This information is intended for educational purposes only and should not be construed as an offer to buy or sell any product or strategy. You should contact your Financial Advisor with questions regarding your individual circumstance.