401(k) Plan Options
What is a 401(k) Plan?
- A 401(k) Plan is an arrangement that allows an employee to defer a percentage of their compensation to a 401(k) account. The amount deferred is usually not taxable to the employee until it is withdrawn.
- The employer is usually not required to make contributions to the plan, however, many employers choose to match their employees' contributions up to a certain percentage.
- For 2017, the maximum amount an employee can defer to a 401(k) plan is $18,000. Employees who are 50 by the end of the year and older can make catch-up contributions of up to $6,000. The maximum employer/employee joint contribution limit is $53,000 for 2017 ($59,000 for those 50 and older).
- Typically, 401(k) plan contributions are invested in a portfolio of mutual funds or index funds, but the plan can provide other investment vehicles such as stocks, bonds, annuities, and REITs.
- 401(k) assets can usually be withdrawn only under the following conditions:
- Employee's retirement, death, disability or separation from service with the employer
- Employee reaching age 59 1/2
- Employee experiences a hardship
- Termination of the plan
- Required minimum distributions (RMDs) must begin at 70 1/2 unless the participant is still employed and the plan allows RMDs to be deferred until retirement
- Plan loans are allowed with restrictions
- High-Income Earners are limited to how much they can contribute to a 401(k) plan
To Begin Establishing Your Company's Retirement Plan,
Please submit the form below.
Paramount Investment Advisors, Inc. is a fee only, Registered Investment Advisory firm providing comprehensive wealth management including financial planning, investment management, tax planning, estate planning, cash flow management, risk management, education planning and retirement planning. We are currently serving the Suwanee, Buford, Sugar Hill, Duluth, Johns Creek, Cumming, Alpharetta, Roswell, and surrounding cities in North Atlanta out of our Suwanee Georgia office. We also work with clients virtually by using technology to our advantage.