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Author: BizDani Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 201  
Subject: Re: Invasion Date: 2/2/2001 5:21 PM
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TheBrigadier is a doppel of a poster the British Invasion board posters (the real ones) came across called Gaias1stServant. He's an American claiming to be a Brit and trying to cause some trouble. No one that I know of at the BI board supports him (except his other doppels).

I don't care who this person is, I am not pursuing any group they claim to represent. They are goofing around and that is fine (and even fun) in many places, but not everywhere.

NOW,... you have a good question:

What is a 401K tax


401k plans are "defined contribution plans." Here in the U.S.

A 401k plan is what's called a defined contribution retirement savings plan. It is the most popular of the IRS-sanctioned retirement savings plans, which include SEPs, Simple IRAs, Profit Sharing Plans and Money Purchase Plans.

In defined contribution plans...

the amount contributed to each participant's account is set ("defined") -- either by the plan participant or by the employer, and as either a flat rate or a percentage of pay.

AND...

the amount each participant will receive upon retirement is left up to the effect of investment performance on the contributions.

Defined contribution plans differ from traditional pension plans, called defined benefit plans, which specify specific amounts of money (the "benefit") employees will receive when they retire rather than the periodic contribution amounts that will be put into the 401k to ensure that final benefit amount.

In 401k plans...

Each participating employee decides the amount to be withheld each month from his or her pay as their 401k contribution.

The employer withholds these amounts BEFORE calculating income taxes on each employee's pay.

The employer forwards the money to a third party administrator, who is responsible for investing the employees' contributions per specific instructions provided by the employees.

Some employers choose to add to participants' 401k contributions through employer matching contributions.

I am not a 401K expert, but those are the basics I believe.

Take Care,

BizDani
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