|
|||||||||
| |||||||||
2026 Quick Facts
Technically these popular plans are part of a Profit Sharing plan. Employees choose to have a percentage of their pay deducted before tax, but subject to FICA, and contributed to the plan instead of taken as salary. They are also known as “Cash or Deferred Arrangements.” Some companies choose to match the employee’s own contribution with a company contribution; 25% of the first 4% of employee contribution is an example of a company match. 401(k) plans often allow for individual participant direction of their plan investments. This allows participants to match the investments of their account to their own goals, age, and risk tolerance. Profit Sharing and 401(k) arrangements can operate side by side to allow both company and employee contribution to the retirement plan. Money Purchase Plan
|