Traditional 401(k)

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Traditional 401(k)

A retirement investment plan in which a contributor defers taxation on contributions until after withdrawal. Under a traditional 401(k), a worker places a portion of his/her pre-tax income into a 401(k) account and allows it to be invested. Taxation is deferred until withdrawal from the account, generally after retirement. Withdrawals prior to the age of 59 1/2 are subject to excise taxes, but the investor must begin disbursements before the age of 70 1/2, unless he/she is still employed with the company offering the 401(k). Most employees are allowed to place up to $16,500 (in 2009) per year into a 401(k), and some employers have matching contributions.
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com)-- AlgoTrades has selected the nation's premier self-directed IRA administer - Advanta IRA as the primary firm to handle IRA, ROTH IRA, and traditional 401K accounts for their automatic investing system.
The all-in annual fees of the plan are projected to be slightly less than 1%; compared to many traditional 401k plans that charge over 2.
The entire account is never taxed, which it is in the traditional 401k, upon distribution.
Based on an "all in" fee structure, the MAX plan has all the customary components of a traditional 401k Plan included in just one basic fee.
Traditional 401k deposits offer a tax break in the year the deposit is made but income tax is due when funds are withdrawn.