401(a) vs. 401(k): What Is the Difference? | 401ks

Both 401(a) and 401(k) plans are authorized by the same section of the tax code. (Getty Images) Traditional 401(k) plans are a primary workplace savings vehicle, as they offer an easy and tax-efficient way to build a nest egg for retirement. However, there is a lesser-known retirement savings plan worth considering: the 401(a) plan. “Most people have never heard of a 401(a),” says Drew Kellerman, founder of financial firm Phase 2 Wealth Advisors in Gig Harbor, Washington. That's because they are often limited to key personnel within an organization and usually only found in the government, education and nonprofit sectors. While not everyone is eligible to receive a 401(a) plan, it's crucial to understand the key differences, benefits, drawbacks and provisions of each option to maximize the value of your retirement savings account. Read more here >>>

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