401(k) Plan

A 401(k) is a qualified profit-sharing plan that allows employees to contribute a percentage of their wages to an account within the plan. Funds can usually be withdrawn under the following conditions:

• At the employee’s retirement, death, disability, or separation from service with the employer;
• When the employee turns age 59 1⁄2; or
• The employee experiences a hardship as defined under the plan.

Generally, early withdrawal from the 401(k) prior to the age of 59 1⁄2 is subject to a 10% penalty unless the individual meets an exception defined under their 401(k) plan.