401(k) plan is the retirement savings plan offered to employees in private sector. Eligible employees can make pre-tax (and for some plans, after-tax) contributions through payroll deductions. The IRS sets contribution limits, which are indexed for inflation and generally change every few years.
Many employers will match employee contributions, up to a small percent of the employee’s salary, and some employers will also engage in profit-sharing contributions. People who contribute to a 401(k) plan are then able to choose from a select list of investment options offered by their employer’s plan. (Employers determine which investment options will be in the plan they offer.)
As an individual’s 401(k) account value increases through investment, the growth is tax-deferred (not subject to capital gains taxes). Upon taking approved distributions (generally at retirement), people pay regular income taxes on 401(k) distributions. There are penalties for taking a distribution prior to age 59½.
The Roth 401(k) concept has recently gained popularity. Unlike traditional 401(k) contributions, Roth 401(k) contributions are after-tax. Because employees already have paid income taxes on their contributions, the money will not be taxed at the time that distributions are taken – regardless of gains. The account value still grows tax-deferred.
Rolling over your 401 k into a gold ira
Financial advisers are of the opinion that employees should rollover their 401 k into a self-directed precious metals IRA’s. As the economy continues to plummet, it paints a picture of a bleak financial future, and a future in which paper currency might lose all of its value and even get phased out.
Now is your opportunity to safeguard your retirement wealth with an asset that is a proven store of value; Gold. It has been around for as long as human beings have been civilized. When you invest in gold, you have nothing to lose but everything to gain. Get started today with Regal Assets and they’ll give you a FREE gold investment kit!