401(k) plan

401(k) plan
401(k) plan /'fōr-ˌō-ˌwən-'kā-/ n [after the section of the Internal Revenue Code that established it]: a retirement savings plan under which an employee may elect to have pretax contributions from his or her wages or salary deferred to a trust for investment

Merriam-Webster’s Dictionary of Law. . 1996.

401(k) plan
n.
A retirement savings plan run by a company for its employees that allows employees to save or invest part of their salary tax-free and often includes contributions by the employer.

The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. . 2008.


401(k) plan
A deferred compensation retirement savings arrangement in which employers withhold a portion of their employees' pretax wages and invest them in a plan where they may earn income, tax-free, until the employee withdraws the money. Some employers also contribute to their employees' 401(k) plan, often through matching employee contributions, at least up to a certain amount. Because a 401(k) is a retirement plan, employees must pay a penalty for early withdrawals, although some plans allow employees to borrow money from their plans without penalty for certain expenses.
Category: Personal Finance & Retirement → Money & Taxes for Retirees
Category: Personal Finance & Retirement → Retirement Planning

Nolo’s Plain-English Law Dictionary. . 2009.

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