401k and 401a: The Advantages of Leveraging both Elective and Mandatory Contribution Retirement Plans

However, not all employer-sponsored retirement plans are created equal. And, as with most things, there are different pros and cons to different types. The best compromises can be made if one understands the differences between plans. And one of the most important differences is the distinction between mandatory contribution and elective contribution plans. Most workers are familiar with elective contribution plans. The most common type of elective contribution plan is a 401k. These are the kinds of plans where the employer sets up a retirement program, offers it to employees, and then employees can choose to participate or not. If an employee chooses to participate, the contributions he or she makes are generally pre-tax, unless the allocation is for a Roth plan (which uses after-tax retirement investments). <a href="https://garyleedeel.medium.com/401k-and-401a-the-advantages-of-leveraging-both-elective-and-mandatory-contribution-retirement-45f7372340f4">Visit Now</a>