Asked by Malusi Pakade on May 28, 2024
Verified
Which one of the following statements about 401k plans is not correct?
A) The employer will typically match some portion of an employee's contributions to a 401k.
B) A 401k plan is a defined contribution plan.
C) Allowable contributions to 401k plans are limited.
D) Withdrawals from 401k plans are not taxed upon retirement.
Defined Contribution Plan
A retirement plan in which the employee, employer, or both make contributions on a regular basis, but the benefit received upon retirement depends on the plan's investment performance.
401k Plans
A retirement savings plan sponsored by an employer that allows employees to save and invest a portion of their paycheck before taxes are taken out.
Employer Match
A contribution made by an employer to an employee's retirement plan, equal to a certain percentage of the employee's own contributions.
- Ascertain the specifics and strengths of assorted retirement arrangements, for instance, 401k and Roth IRA.
- Comprehend the regulations and restrictions on contributions to retirement accounts and the associated tax consequences.
Verified Answer
Learning Objectives
- Ascertain the specifics and strengths of assorted retirement arrangements, for instance, 401k and Roth IRA.
- Comprehend the regulations and restrictions on contributions to retirement accounts and the associated tax consequences.
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