What Does It Mean When A Retirement Plan Is Said To Be Tax Qualified?

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   Steve Savant

   Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

   Qualified retirement plans can be defined benefit or contribution plan. In a defined contribution plan, the contributions are pretax (or qualified). The accounts accumulate tax deferred and distributions are taxable as ordinary income tax rates. Qualified defined contribution plans, like 401(k)s, are under ERISA (Employee Retirement Income Security Act of 1974.)

   Answered on September 12, 2013

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