A retirement plan that accepts employee contributions, and oftentimes matches them, 401(k) plans come in many shapes and sizes. Traditional, tax-deferred 401(k) contributions are made before income taxes are applied, and earnings and contributions are not taxable until they are withdrawn. Roth 401(k) contributions are made with after-tax dollars, but withdrawals, including earnings, are tax-free if certain conditions are met.
|Maximum total plan contribution that the employer may deduct||
25% of total eligible payroll (maximum eligible pay per participant is $275,000) plus the amount of elective deferrals contributed
|Maximum annual allocation to participant’s account||
100% of participant’s total pay or $55,0001, whichever is less
|Maximum annual participant deferral (cannot exceed 100% of pay)||
Up to $18,5002; catch-up contribution of $6,000 if age 50 or older. Annual participant deferral can be before-tax, Roth after-tax or both, depending on plan terms
|Required employer contribution||
Discretionary, unless the plan is top heavy3
Drop in one of our branch locations or call our One Call Center at (800) 827-4522 for more information or to open an account.
1 The DC annual additions limit is effective for limitation years ending in the calendar year. The dollar limit is increased by the amount of the applicable catch-up contribution.
2 Salary deferrals into other qualified retirement plans count toward the $18,000 personal annual maximum contribution amount.
3 A plan is top-heavy if, on the determination date, the total value of the accounts of all key employees is greater than 60% of the total value of the accounts of all employees.
Investment products are not deposits or obligations of, or guaranteed by Lake City Bank or any other bank, are not insured or guaranteed by the FDIC or any governmental agency and are subject to investment risks, including possible loss of principal invested. Past performance is not a guarantee of future results.