What is the difference between a 401k and a 401a?

While the 401k plan is well-known, there is a lesser-known part of the “401” section of the tax code designated “a.” While the 401k and 401a have many similarities there are some key differences.

401k plans are usually offered by corporations or private employers, while 401a plans are often used by government employers. Also, 401k accounts are open to all employees but 401a accounts are usually reserved for special employees as a special incentive.

What is the difference between a 401k and a 401a?

401k contributions are completely voluntary, but employers who offer 401a plans may not give you an option. 401a contributions are often set by the employer and are mandatory – meaning it is up to your employer to decide how much (or how little) income you defer.

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Your employer may have more control over your investment options with a 401a than with a 401k. 401a investment options are usually very similar to those offered to 401k investors, but it’s the power held by the employer that makes the difference.

Call (800) 767-1423 24/7 or visit www.401kRollover.com if you have questions about rolling a 401a, 401k or other employer-sponsored retirement account into a self-directed IRA.


About 401kRollover.com

The 401kRollover.com website is a comprehensive database of retirement account rollover providers in the United States. Due to the faltering economy and increasing economic problems, many investors have started to look around for alternative ways to save and make money. 401kRollover.com allows you to find providers by location and name, and you can also call us directly at (800) 767-1423 to flex your financial muscle.
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