Curious Cat Investing Dictionary: 401(k)

401(k) - Employee sponsored retirement plan that allows employees to have savings to grow tax deferred.

403(b) - similar to a 401(k) plans but for: educational institutions, public hospitals, and non-profit organizations. 401(k) and 403(b) are the portions of the legal code that details the law on these plans.

Roth 401(k) and Roth 401(b) - new in 2006 this is the equivalent of the Roth IRA but in the form of a 401(k) or 403(b).

401(k) and 403(b) plans are similar to IRAs and can be "rolled over" into IRAs when the employees leaves the employer. While at the employer 401k and 403b plans are invested in the options defined by the employer - normally a choice of mutual funds. As with IRAs withdrawals can begin at 59 1/2 and must begin by 70 1/2.

Tax laws change and this information may not reflect the current rules so go do your own research or consult an advisor.

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