Posted on: 04th Apr, 2004 11:08 pm
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.
Related Article:
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.
Related Article:
PLEASE IF I CAN HAVE A LOAN FROM MY 401K FOR EMERGENCY.
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
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
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.
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.
WHAT WEB SITE DO I GO TO TO SEE IF I CAN GET A LOAN
Hi HEAHER,
You can check out the websites of the local lenders in order to know whether or not you can qualify for a loan. You should note that the primary criteria for getting a mortgage with a good rate of interest is to have a good credit score and a stable income. You can even speak to the lenders of this community and seek a no obligation free mortgage consultation from them. This will let you know whether or not you can get approved for a mortgage. You'll also be able to know about the present market rates and terms.
You can check out the websites of the local lenders in order to know whether or not you can qualify for a loan. You should note that the primary criteria for getting a mortgage with a good rate of interest is to have a good credit score and a stable income. You can even speak to the lenders of this community and seek a no obligation free mortgage consultation from them. This will let you know whether or not you can get approved for a mortgage. You'll also be able to know about the present market rates and terms.