Frequently Asked 401(k) Questions (FAQs)

1. What is a 401(k) plan?
2. Should I offer my employees a 401(k) plan?
3. What are the benefits to employees?
4. Are there any benefits or drawbacks to the employer?
5. What is a salary reduction arrangement?
6. How does a 401(k) plan interact with a salary reduction arrangement?
7. What are the nondiscrimination rules?
8. How do I know if my plan is discriminatory?
9. What is a highly compensated employee (HCE)?
10. How does a 401(k) integrate with other company programs?
11. Can employees take money out of a 401(k) plan prior to retirement?
12. What are the hardship withdrawal rules?
13. What funds are available for a hardship withdrawal?
14. What are the tax consequences of a hardship withdrawal?
15. Can a loan be taken from funds in a 401(k) plan?
16. What are the advantages of a loan vs. a hardship withdrawal?
17. What are the disadvantages of a loan agreement?
18. Are there any limits on the amount that can be contributed to a 401(k) plan?
19. What happens if you contribute more than the allowable amount?
20. More 401(k) FAQs Still have a 401(k) question? Try the IRS EP Customer Account Services