Keith Miles Attorney-at-Law 2250 Oak Road PO Box 430 Snellville, GA 30078 678-666-0618 mileslawoffice@gmail.com www.TimeToEstatePlan.com
401(k) Plans
Qualified cash or deferred arrangements (CODAs) permitted under Section 401(k) of the Internal Revenue Code, commonly referred to as "401(k) plans," have become one of the most popular types of employer-sponsored retirement plans.
that you'll be automatically enrolled at a 3% pretax contribution rate (or some other percentage) unless you elect a different deferral percentage, or choose not to participate in the plan. This is sometimes called a "negative enrollment" because you haven't affirmatively elected to participate--instead you must affirmatively act to change or stop contributions. If you've been automatically enrolled in your 401(k) plan, make sure to check that your assigned contribution rate and investments are appropriate for your circumstances.
and projected investment results are also important factors. A financial professional can help you determine which course is best for you. Whichever you decide--Roth or pretax--make sure you contribute as much as necessary to get the maximum matching contribution from your employer. This is essentially free money that can help you reach your retirement goals that much sooner.
It's made after the end of a five-year waiting period The payment is made after you turn 59, become disabled, or die The five-year waiting period for qualified distributions starts with the year you make your first Roth contribution to the 401(k) plan. For example, if you make your first Roth contribution to your employer's 401(k) plan in December 2014, your five-year waiting period begins January 1, 2014, and ends on December 31, 2018. Each nonqualified distribution is deemed to consist of a pro-rata portion of your tax-free contributions and taxable earnings.
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliablewe cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.