Avoid These Errors on the Path to 401(k) Success
Column distributed by Hearst Connecticut Media Group.
Links to resources referenced:
- Plan Sponsor Council of America, “66th Annual 401(k) Survey of Profit Sharing and 401(k) Plans”
- https://www.psca.org/industry-content/surveys/annual-401k-survey/
- Related column excerpts:
- “The survey of 687 plans confirmed that only 20.6% of plans did not offer matching contributions. Instead, 13.8% offered non-matching contributions and 6.8% offered no contributions of any type.”
- “Just about every 401(k) plan has a loan feature (82.9%, according to the Plan Sponsor Council of America survey).”
- Merrill, “Should you borrow or take an early distribution from your 401(k)?”
- https://www.ml.com/articles/should-i-borrow-from-my-401k.html
- Related column excerpt:
- “While loan provisions may be a blessing in the case of emergencies, they should not be used for consumer purchases. ‘Should you borrow or take an early distribution from 401(k)?’ an article by Merrill, discusses the considerations and risks involved.”
- Internal Revenue Service, “401(k) resource guide – Plan participants – General distribution rules”
- https://www.irs.gov/retirement-plans/plan-participant-employee/401k-resource-guide-plan-participants-general- distribution-rules
- Related column excerpt:
- “Timing: According to an IRS resource, most loans have to be repaid within five years, unless the loan is used to buy a primary residence.”