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Simple English definitions for legal terms

401(k) plan

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A quick definition of 401(k) plan:

A 401(k) plan is a type of retirement plan that an employer offers to their employees. It allows employees to save money for retirement and defer taxes until they withdraw the money. The employee can contribute up to a certain amount each year, and the employer may also contribute a certain amount. The money in the 401(k) account can be invested in different options. When the employee reaches a certain age, they can start withdrawing the money without penalty. However, if they withdraw the money before that age, they will have to pay a penalty. There is also a type of 401(k) called a Roth 401(k) which taxes the contributions upfront, but withdrawals are tax-free.

A more thorough explanation:

A 401(k) plan is a type of retirement plan that an employer offers to their employees. It allows employees to save money for retirement while deferring taxes. The name comes from the section 401(k) of the Internal Revenue Code.

Employees can contribute a certain amount of their salary to their 401(k) plan each year, up to a limit set by the IRS. Employers may also contribute to the plan, often matching a portion of the employee's contribution. For example, if an employee contributes $1000 to their 401(k), their employer may contribute an additional $500.

Contributions to a 401(k) plan are tax-free until the employee begins withdrawing the money during retirement. At that point, the withdrawals are taxed as income. If an employee withdraws money from their 401(k) before they reach a certain age, they may have to pay a penalty tax in addition to regular income taxes.

There are also Roth 401(k) plans, which tax contributions before they enter the account but allow tax-free withdrawals during retirement. Employees can contribute to both a traditional 401(k) and a Roth 401(k), but their total contributions cannot exceed the IRS limit.

For example, if an employee earns $50,000 per year and contributes 10% of their salary to their 401(k), they would contribute $5,000 per year. If their employer matches 50% of their contribution, they would receive an additional $2,500 from their employer. The employee's contributions and any earnings on those contributions would not be taxed until they begin withdrawing the money during retirement.

401(k) | 707(b) action

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THATS SO FUNNY
i cant i would go crazy
JumpySubsequentDolphin
20:50
i need to know who decided to do that.
JumpySubsequentDolphin
20:50
omg im on a plane weeeee
the devil
youre on a plane??? LSD made the mile high club??
20:50
yo splitterus are you in school already
20:50
it says ur c/o 2027
JumpySubsequentDolphin
20:51
@SplitterusClitterus: HAHAH yes
ur user is hilarioussss and no i just graduated this may and am now applying ---also im out of messages so ill take a lil
20:52
roger dat. see u in heck
im back, r u applying this cycle too
JumpySubsequentDolphin
21:32
this child fell asleep on me
JumpySubsequentDolphin
21:32
im so uncomfortable
just push him off the entire seat
JumpySubsequentDolphin
21:34
LMAOOOO
JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
22:12
@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
22:23
i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
22:25
then someone was like "what does jm stand for" and i was like .. well
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@JumpySubsequentDolphin: wait this is so cute, also where r u going
JOE MBIDEN
JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
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