Putting Money Into Your 401(k)
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The following are general answers to Frequently Asked Questions about putting money into your 401(k) account. For specific answers to your plan, check your Summary Plan description or contact your plan administrator.
- How do I make contributions?
It’s simple – once eligible to participate, your contributions are made through payroll deduction.
To participate in the 401(k) retirement plan, you must satisfy the eligibility requirements – you must be 21 years of age and have completed one year of service with the company. Then complete an enrollment form and a Salary Reduction Agreement. The amount you designate as a deduction will be automatically withdrawn from your paycheck and contributed to your 401(k) retirement plan.
- Can I change the amount or stop my contributions?
To change the amount of your contribution contact your plan administrator and initiate a new Salary Reduction Agreement, as allowed by your plan. You can discontinue your contributions at any time by notifying your plan administrator and terminating your Salary Reduction Agreement.
- Are there limits to the amount I can contribute?
The tax law limits the maximum contributions that can be taken out of your salary. If desired, you may contribute less. You may be able to put in additional catch-up contributions, if you are age 50 or older.
Check with your plan administrator or Summary Plan Description for details specific to your plan.
- How much can I contribute if I join the plan mid-year?
You can establish your Salary Reduction Agreement to make up for any missed months, as long as your total contribution does not exceed any plan document or legal limits.
- Does 401(k) participation affect my Social Security benefits?
No. Social Security taxes and benefits will remain unchanged.
- What investment choices do I have for my 401(k) plan contributions?
There are a variety of investment options available for, and specific to, your 401(k) plan. Contact your plan administrator for the list of your choices.
- Can I contribute to other retirement plans too?
Yes. You may contribute to other retirement plans (for example: a Simple 401(k), 403(b), or IRA), however, contribution limits may apply.
- Will I ever have to pay taxes on the money contributed to my 401(k) plan?
Yes. At withdrawal, we are required to report the distribution as ordinary income. The good news is – you may be in a lower tax bracket if you wait until retirement, and may then be responsible for a reduced tax bill.
- How long can I contribute to my 401(k) plan?
You can contribute to your 401(k) plan as long as you are an eligible employee of the employer sponsoring the plan and the employer continues to sponsor the plan and permits salary reduction contributions.
- Will my employer also make contributions?
Your employer may match a portion of your elective contribution. The employer may also contribute a profit-sharing contribution based on your earnings for the year. See your Summary Plan Description for information specific to your plan.
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