| General |
| 1. How much can I contribute into a retirement plan? |
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| For 2024, an employee can contribute up to $23,000 into a qualified retirement plan (i.e. 401(k)). However, if the employee is age 50+ during the year then they can contribute an additional $7,500 as "catch up" for a total of $30,500.
For 2025, an employee can contribute up to $23,500 into a qualified retirement plan (i.e. 401(k)). However, if the employee is age 50-59 or 64+ as of the end of the calendar year then they can contribute an additional $7,500 as "catch up" for a total of $31,000. Also, new starting in 2025, employees age 60-63 as of the end of the calendar year can contribute an additional $11,250 as "catch up" for a total of $34,750. For a full listing of all retirement related IRS limits, click here. |
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| 2. What is a Safe Harbor plan (and what are the requirements)? |
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| A Safe Harbor 401(k) plan allows employers to automatically pass certain compliance tests if the plan satisfies specific contribution and notice requirements. For a brief overview of Safe Harbor plans, click here. |
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| 3. What are the deposit timing requirements for employee deductions (401(k) deferrals and loan repayments)? |
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| Department of Labor rules require that the employer deposit deferrals to the trust as soon as the employer can; however, in no event can the deposit be later than the 15th business day of the following month. Remember that the rules about the 15th business day isn't a safe harbor for depositing deferrals; rather, that these rules set the maximum deadline. DOL provides a 7-business-day safe harbor rule for employee contributions to plans with fewer than 100 participants.
401(k) Plan Fix-It Guide - You haven't timely deposited employee elective deferrals » |
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| Plan Distributions |
| 4. How do I request a withdrawal from my retirement account? |
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| You may be able to contact your investment company directly via their website or toll free phone number (contact information will be on your quarterly participant statement). Otherwise please call PCC at (920) 437-0313 for assistance. |
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| 5. Will the additional 10% early withdrawal tax apply to my distribution? |
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| To discourage the use of retirement funds for purposes other than normal retirement, the law imposes an additional 10% tax on certain early distributions from certain retirement plans. The additional tax is equal to 10% of the portion of the distribution that's includible in gross income. Generally, early distributions are those you receive from a qualified retirement plan or deferred annuity contract before reaching age 59-1/2. For more information click on the following link:
Additional Tax on Early Distributions from Retirement Plans Other Than IRAs » |
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