An employer retirement plan is a retirement plan set up by an employer for the benefit of the employees. It encompasses various types of plans including pension, profit-sharing, 401(k), union plans, and others specifically outlined by tax laws.
A hardship distribution is a withdrawal from a Section 401(k) plan made due to the distributee's immediate and heavy financial needs, not exceeding the amount necessary to satisfy such needs. Examples include medical expenses, post-secondary education fees, and preventing eviction or foreclosure of a principal residence.
A Section 401(k) Plan allows an employee to contribute pretax earnings to an individual account, invested in various financial instruments, accumulating tax-deferred until withdrawal.
