1. Philip Slama 401(k) Plans What Employees Need To Know

2. Philip Slama What is a 401(k) plan? A 401(k) plan lets you contribute a percentage of your salary to a trust account A 401(k) plan lets you contribute a percentage of your salary to a trust account The earnings in the account can grow, tax free, until you withdraw the money. The earnings in the account can grow, tax free, until you withdraw the money. Your company may also match some of your contribution. Your company may also match some of your contribution.

3. Philip Slama How Do 401(k) Plans Work? Investing money through your 401(k) plan gives you the benefit of tax- deferred saving. Investing money through your 401(k) plan gives you the benefit of tax- deferred saving. Some companies offer a match as an incentive to join the company retirement plan. Some companies offer a match as an incentive to join the company retirement plan. It means that the company will contribute a certain amount to your account for every dollar that you contribute, up to a certain limit. It means that the company will contribute a certain amount to your account for every dollar that you contribute, up to a certain limit. Saving is ultra- convenient with your 401(k) because the money comes right out of your pay before you get your paycheck. Saving is ultra- convenient with your 401(k) because the money comes right out of your pay before you get your paycheck. For those unexpected circumstances that can arise, many plans allow employees to dip into their account balances before retirement. For those unexpected circumstances that can arise, many plans allow employees to dip into their account balances before retirement.

4. Philip Slama How Much Can I Contribute? Your contributions to a company 401(k) plan are limited. Your contributions to a company 401(k) plan are limited. Year Limit: 2003 $12,000; 2004 $13,000; 2005 $14,000; 2006 $15,000. Year Limit: 2003 $12,000; 2004 $13,000; 2005 $14,000; 2006 $15,000. After 2006, the maximum pre-tax contribution limit is indexed in $500 increments for inflation. After 2006, the maximum pre-tax contribution limit is indexed in $500 increments for inflation.

5. Philip Slama When Can I Withdraw Money? Certain medical expenses for you, your spouse or your dependents Certain medical expenses for you, your spouse or your dependents Purchase of a primary residence (excluding mortgage payment) Purchase of a primary residence (excluding mortgage payment) Payments of certain post- secondary education expenses for the next year for you, your spouse or your dependents Payments of certain post- secondary education expenses for the next year for you, your spouse or your dependents To prevent eviction from or foreclosure on your primary home To prevent eviction from or foreclosure on your primary home You must be over 59 ½ years to withdraw money from your 401k plan You must be over 59 ½ years to withdraw money from your 401k plan

6. Philip Slama Penalties For Early Removal? As a result of the Economic Growth and Tax Relief Reconciliation Act of 2001, hardship withdrawals are not eligible to be rolled over, and are not subject to a federal income tax withholding As a result of the Economic Growth and Tax Relief Reconciliation Act of 2001, hardship withdrawals are not eligible to be rolled over, and are not subject to a federal income tax withholding You may still owe income taxes and a possible 10% early withdrawal penalty if you are under 59 1/2 when you file your annual income tax return You may still owe income taxes and a possible 10% early withdrawal penalty if you are under 59 1/2 when you file your annual income tax return State and local taxes may also apply State and local taxes may also apply