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	<title>New answer on: Is A Profit Sharing Plan A 401K?</title>

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		<title>By: Karl Renwanz</title>

		<link>https://insurancelibrary.com/retirement-plans/is-a-profit-sharing-plan-a-401k</link>

		<dc:creator>Karl Renwanz</dc:creator>

		<pubDate>Mon, 22 Sep 2014 15:47:22 +0000</pubDate>

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		<description><![CDATA[A profit sharing plan falls under IRS section 401.  Both a profit sharing plan and 401k are forms of retirement plans that allow employees to make pre-tax contributions to an account where contributions and earnings are not taxed until they are pulled out during the distribution phase.  It is important to note that a profit sharing plan does not have to be part of a retirement plan.

A profit sharing plan typically allows the employer to decide from year-to-year whether to contribute on behalf of participants.  It would make sense that this decision follows the company&#039;s profitability for the previous year.

While there are variations of both types of retirement plans, there are many similarities between profit sharing plans and 401k&#039;s such as the ability to take out a loan or pull money out based on a narrow definition of hardship.  Both can have non-elective employer contributions.  An employer can offer both a profit sharing plan and a 401k.

You might find this link to an IRS publication helpful regarding profit sharing plans.
https://www.irs.gov/pub/irs-pdf/p4806.pdf]]></description>

		

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