What are the different types of 401k plan?

here are basically two types of 401k plan, based on the nature of the plan.
1) Traditional 401k plan
2) Roth

 Tax Rules for Traditional 401k Plan:
In this types of 401k plan wages are amount are contributed before taxes from each Payecheck, It is just like of deferred salary. Also, The Taxable income drops by the amount you contribute. Also, a participant has to pay the income taxes on the based of contribution and earning upon withdrawal.

Withdrawal rule for traditional 401k plan:
In this types of 401k plan, you can not withdraw your funds before age 59 ½ , But you can withdraw the amount at age 55, if you leave your employer at age 55 or older. If you decide to withdraw the fund in early, then you have to pay 10% penalty on top of the usual tax bill.


Tax rule for Roth 401k Plan.
In this types of plan contributions are made with money that is already been taxed. It means, You do not have to pay any taxes upon withdrawal.

Withdrawal rules for roth 401k plan:
This types of 401k plan has better flexibility than traditional 401k plan. It provides free access to your money as long as you have held the account for 5 years.

401k maximum catchup contribution Limit for the year 2012

The IRS has now released the official 2012 401k, 403b and other 401k retirement plan contribution limits, which reflect a $500 increase over the 2011 standard 401k contribution limit. It is a result of higher inflation and the latest cost of living adjustment (COLA) figures. The 2012 contribution limits is the first increase in three years. Each year in October these limits are adjusted according to a formula based on the inflation rate  in the third quarter vs. the previous year’s quarter.

Early Withdrawals - 401k Advice

Early Withdrawals - 401k Advice
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What Is A 401K?

What Is A 401K?
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Innovation Is a Discipline, Not a Cliché - Scott Anthony - Harvard Business Review

Innovation Is a Discipline, Not a Cliché - Scott Anthony - Harvard Business Review

2011 vs. 2012 ,401k Contribution Limits and Catch-up Amounts

Updated and new 401k contribution limits for 2012 has been released by IRS,which reflect a $500 increase over the 2011 standard 401k contribution limit.

What this means for your 401k retirement plans:

The maximum amount an employee can contribute to a 401k in 2012 will increase to $17,000 and for individuals over the age of 50,  While their catch-up contribution will remain unchanged at $5,500 .

Points to be remembered:

 401k maximum contribution limit

Additional total limits

Maximum Employer Contributions

Maximum Employee and Employer 401K Contribution Limits and Catch-up Amounts

Contribution deadlines

More on the 401K limits and contribution rules

Catch up Contribution Limits for those 50+ has also increased

Benefits of 401K GPS membership

Here are the benefits of 401k GPS membership.
We will teach you first that what is 401k plan?


Find more expert advice for your 401k plan,
Discuss hot topics with other members of 401k GPS,
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Quarterly,Half- yearly and year-end reports and latest market commentary reviews.

401k GPS Membership Process:
1) Sign Up
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Important note: The 401k limits or 401k contribution Limit for year 2012 is now become $17,000