401a plan is offered by Government and Non-profit Organizations. They can be cited as a money-bought retirement package offered mainly by NGOs, government establishments, and educational institutions. <\/p>

The 401a is customized and extended as an incentive to keep a few employees loyal to the organization.<\/p>\n

Even though it is an incentive, the monthly contribution to this plan is usually decided by the employer. Even if the employee contributes to the 401a, additional contributions to the plan are also made by the employer.<\/p>\n

The employer of the beneficiary of the 401a will schedule the contribution into the 401a, and will also schedule the payment whether it needs to be monthly, quarterly, bi-annual or annual contribution of the contributions.<\/p>\n

If the employee leaves the organization, then they can withdraw by rolling the contributions over to another qualified retirement savings plan or choose to buy an annuity with it.<\/p>\n

Participation for all employees is made mandatory for most organizations offering the 401a. And so are the employer\u2019s contributions but employers have the power to control the amount contributed to the 401a. <\/p>

The eligibility of an employee taking part in this retirement plan will normally be determined by the employer.<\/p>\n

One of the main characteristics of the 401a is that it can be contributed before or after-tax deduction.<\/p>\n

The employee can withdraw part of this investment fund in case of emergency, or due to some unforeseen events, and the amount withdrawn will be liable to income taxes.<\/p>\n

If there are early withdrawals from your 401a retirement plan they are subject to penalties.  If an employee withdraws from their 401a before they attain the age of 60 there is a penalty. In most cases, 59 \u00bd is the age limit at which an employee is advised to withdraw.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t