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Investment and Retirement with 401K Accounts

Employer and employee profit sharing plans are known as 401k accounts. They are corporate pension plans where an employee contributes a defined amount into the 401k and the employer can match a percentage of it.

These contributions are normally made with after tax dollar amounts. This is considered a defined contribution plan.

All contributions made into the account by the company are made in the name of the employee. Should the employeee leave, the contributions and the investment value of the account belong to the employee - perhaps only to a point.

If the employee has not fullfilled their minimum number of years with the company, the company can retract a percentage of the 401k contributions they made - under the rules of the plan. All money invested by the employee remain with the employee when transferring or rolling over the 401k into another corporate retirement plan or personal retirement plan.

Vesting

The vesting period in a 401k investment account is the time the employee must fullfill their years to ne 100% vested. This means all contributions made by the company under the plan are 100% available to the person should they leave their job.

The vesting period under these accounts can vary. Usually this period runs 5 years.

Investments

The securities account or investments within the 401k are varied with each plan or company. Usually, the employee will have a wide array of mutual fund or other fund choices to dedicate investment money to. The investor can change the allocation and choices in the 401k as they see fit. Rates of return and retirement value will vary with the performance of the securities in the investment account.

Corporate Retirement Planning Questions - for company or individuals

We are education professionals and train many of the very advisors selling and servicing 401 k and other corporate plans. We can help you directly with any questions you have. Whether they are related to rules, laws, investment choices, current regulations, fees you are being charged and more.

Let Us Help:

If you are an individual with a retirement account or 401 k and need assistance with in service distribution or other transfer rollover questions, American Investment Training can help. You can submit your question to our Retirement Plan Help page for individuals.

Company Help

If you are a company in need of servicing questions for your employees 401 k or have questions on fees, compliance or other areas of concern, please use our:


401k Advice - Discussion Blog for Plan Administrators, Employers and Employees.

Retirement Plan Links for Employers and Investors

* Review “Depending on the size of the IRA and the age of the beneficiary, it might be smarter to pay the penalty than to liquidate the account simply to avoid the penalty,” says Twila Slesnick, author of IRAs, 401(k)s & Other Retirement Plans (Nolo, $34.99). Kiplinger’s Retirement Report
""A more impressively clear and comprehensive layman's guide is IRAs, 401(k)s & Other Retirement Plans..."" U.S. News & World Report
""Few resources are as valuable when it comes to financial planning in later life."" The Wall Street Journal
""Uses everyday language to describe Internal Revenue Service rules for making withdrawals from retirement plans."" The Wall Street Journal
""This book belongs on the bookshelf of anyone with a retirement plan. Here's where you'll find the answers."" Kiplinger's Personal Finance

403b Rules

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