Chapter 5
Signing Up for a 401(k)
IN THIS CHAPTER
Understanding the rules for participating
Signing up when you can
Making the most of employer contributions
Choosing your investments
I occasionally hear from people who are self-employed or whose employers don’t offer a retirement plan who want to know how they can open a 401(k) account. Unfortunately, it’s not that simple. Unlike an IRA that you can open on your own, a 401(k) is only available through your employer.
Most companies aren’t currently required to offer 401(k) plans (or any retirement plan, for that matter), but a growing number of states are requiring employers to do so. The fact that your employer offers a 401(k) doesn’t mean that you’re automatically eligible to contribute, though. Before joining your employer’s 401(k) plan, you must fulfill your employer’s eligibility requirements.
The information in this chapter can help you understand the paperwork you need to fill out when you sign up for your 401(k) plan. It also explains how much you’re allowed to contribute, whether you’re just signing up or whether you’ve ...
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