Qualified Plan

qualified plan

An employer-sponsored tax-deferred employee benefit plan that meets the standards of the Internal Revenue Code of 1954 and that qualifies for favorable tax treatment. Contributions by an employer and an employee accumulate without being taxed until payouts are made at the employee's retirement or termination.

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Qualified Plan

An annuity that one buys along with one's employer. That is, the annuitant and his/her employer both make tax-deferred contributions to the plan for a certain period, with withdrawals coming upon retirement. If the annuitant begins withdrawals before a certain age, withdrawal penalties apply. One may continue to make contributions until a certain age, usually around 65.

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Qualified Retirement Plan (Qualified Plan)

What Does Qualified Retirement Plan (Qualified Plan) Mean?

A plan that meets the requirements of the Internal Revenue Code and as a result is eligible to receive certain tax benefits. These plans must be for the exclusive benefit of retirees or employees or their beneficiaries.

Investopedia explains Qualified Retirement Plan (Qualified Plan)

Two types of qualified plans are defined—benefit and defined— contribution plans. Some examples of defined-contribution plans are 401(k) plans, money-purchase pension plans, and profit-sharing plans.

Related Terms:
• Defined-Benefit Plan
• Defined-Contribution Plan
• Individual Retirement Account—IRA
• Roth IRA
• Tax Deferred