A 401(k) is a type of retirement savings account in the United States, which takes its name from subsection 401(k) of the Internal Revenue Code (Title 26 of the United States Code). A contributor can begin to withdraw funds after reaching the age of 59 1/2 years. 401(k)s were first widely adopted as retirement plans for American workers, beginning in the 1980s. The 401(k) emerged as an alternative to the traditional retirement pension, which was paid by employers. Employer contributions with the 401(k) can vary, but in general the 401(k) had the effect of shifting the burden for retirement savings to workers themselves. In 2011, about 60% of American households nearing retirement age have 401(k)-type accounts .
Employers can help their employees save for retirement while reducing taxable income under this provision, and workers can choose to deposit part of their earnings into a 401(k) account and not pay income tax on it until the money is later withdrawn in retirement. Interest earned on money in a 401(k) account is never taxed before funds are withdrawn. Employers may choose to, and often do, match contributions that workers make. The 401(k) account is typically administered by the employer, while in the usual "participant-directed" plan, the employee may select from different kinds of investment options. Employees choose where their savings will be invested, usually, between a selection of mutual funds that emphasize stocks, bonds, money market investments, or some mix of the above. Many companies' 401(k) plans also offer the option to purchase the company's stock. The employee can generally re-allocate money among these investment choices at any time. In the less common trustee-directed 401(k) plans, the employer appoints trustees who decide how the plan's assets will be invested.
Lima Arizona Enrollment and Salary Deferral Agreement is a contractual arrangement typically entered into by employees and employers within the state of Arizona. This agreement allows employees to voluntarily enroll in various savings or retirement plans offered by their employers, while also deferring a portion of their salary towards these plans. One type of Lima Arizona Enrollment and Salary Deferral Agreement is the 401(k) Plan. This agreement allows employees to contribute a percentage of their pre-tax salary towards a retirement savings account. Employers may choose to match a certain percentage of the employee's contribution, thereby incentivizing employees to save for their retirement. Another type of agreement is the 403(b) Plan, which is commonly utilized by employees in tax-exempt organizations, such as educational institutions, hospitals, or certain non-profit organizations. Similar to the 401(k) Plan, employees can defer a portion of their salary towards this retirement savings account. Furthermore, the Lima Arizona Enrollment and Salary Deferral Agreement may also encompass a Deferred Compensation Plan. This agreement allows employees to defer a portion of their salary or bonuses to a later date, typically after their retirement. The deferred income is then invested and grows tax-deferred until the employee receives the payments. It is important to note that these agreements are designed to provide employees with long-term financial security and tax advantages. By participating in such plans, employees can save for their post-retirement years and potentially enjoy employer matches or incentives, ultimately maximizing their overall savings. In summary, Lima Arizona Enrollment and Salary Deferral Agreement is a comprehensive arrangement that enables employees within the state of Arizona to voluntarily enroll in various savings or retirement plans. It includes agreements such as the 401(k) Plan, 403(b) Plan, and Deferred Compensation Plan, helping employees secure their financial future while enjoying potential tax benefits.Lima Arizona Enrollment and Salary Deferral Agreement is a contractual arrangement typically entered into by employees and employers within the state of Arizona. This agreement allows employees to voluntarily enroll in various savings or retirement plans offered by their employers, while also deferring a portion of their salary towards these plans. One type of Lima Arizona Enrollment and Salary Deferral Agreement is the 401(k) Plan. This agreement allows employees to contribute a percentage of their pre-tax salary towards a retirement savings account. Employers may choose to match a certain percentage of the employee's contribution, thereby incentivizing employees to save for their retirement. Another type of agreement is the 403(b) Plan, which is commonly utilized by employees in tax-exempt organizations, such as educational institutions, hospitals, or certain non-profit organizations. Similar to the 401(k) Plan, employees can defer a portion of their salary towards this retirement savings account. Furthermore, the Lima Arizona Enrollment and Salary Deferral Agreement may also encompass a Deferred Compensation Plan. This agreement allows employees to defer a portion of their salary or bonuses to a later date, typically after their retirement. The deferred income is then invested and grows tax-deferred until the employee receives the payments. It is important to note that these agreements are designed to provide employees with long-term financial security and tax advantages. By participating in such plans, employees can save for their post-retirement years and potentially enjoy employer matches or incentives, ultimately maximizing their overall savings. In summary, Lima Arizona Enrollment and Salary Deferral Agreement is a comprehensive arrangement that enables employees within the state of Arizona to voluntarily enroll in various savings or retirement plans. It includes agreements such as the 401(k) Plan, 403(b) Plan, and Deferred Compensation Plan, helping employees secure their financial future while enjoying potential tax benefits.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.