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 Sam
Site Admin
Joined: 21 May 2005
Posts: 281
Location: CALIFORNIA
117.49 Dollars($)
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 Posted: Sun Apr 04, 2004 11:08 pm Post subject: Retirement Plan 401(k) & 403(b) |
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In case you are planning to save a lump-sum amount for your life after retirement, you can go through the 401(k) or 403(b) Retirement Plans. These can make you happy and tension-free after you retire.
What is 401(k) Plan?
401(k) Plan is a retirement savings plan that allows employees of profit and tax-exempt organizations to get a part of their salary deducted for contributing towards their retirement.
What is a 403(b) Retirement Plan?
A 403(b) Retirement Plan allows employees of educational and non-profit organizations to contribute to their retirement program by reducing a part of their salary. It is also known as tax-sheltered annuity or tax-sheltered account (TSA). Employers qualifying for this plan may defer taxes on their contributions to certain annuity contracts or custodial accounts.
Both the Plans provide you with favorable options for saving a lump-sum amount for the future. Not only do they allow you to invest from the plan accounts, but also permit you to take loans in times of emergency. So in case your employer doesn't offer one, ask him to start one.
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MYRIAM MORAN
Guest
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| Posted: Tue Sep 02, 2008 7:38 am Post subject: 401 K LOAN |
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| PLEASE IF I CAN HAVE A LOAN FROM MY 401K FOR EMERGENCY. |
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.56 Dollars($)
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| Posted: Thu Sep 04, 2008 6:16 am Post subject: |
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Yes MYRIAM, you can take out a loan from 401k. But if you're below 59 and 1/2 years of age, you'll have to pay taxes and penalty worth 10% of your total distribution. This is because prior to that age any cash withdrawal from 401k account is treated as early distribution.
Let me know what financial crisis you're going through. May be I can help you with some advice on any alternative option to resolve your financial problems.
good luck
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vegas_storms
Joined: 12 Sep 2008
Posts: 67
3.54 Dollars($)
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| Posted: Sat Sep 13, 2008 1:56 am Post subject: |
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Actually Caron is wrong on this issue.
When taking a "loan" from your 401k you do NOT have to pay taxes or a penalty and will be making payments including interest to the loan (to yourself). Most companies will allow you to take up to 2 loans from your 401k.
If you were to take a distribution then Caron's information would be correct, but not on a loan.
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Information given is an opinion, for true legal advice please consult an attorney. |
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