8/16    When I go to these job infosessions I keep hearing 401k plan.
        What the hell is that?
        \_ Retirement funds.
          \_ its a sneaky way you can set aside some of your money for
            retirement, before the IRS can get their greedy hands on it.
            they tax it later, but havig it put away pre-tax makes it a
            much better deal.   some companies match some 401k contributions
            too
                \_ Not sneaky at all.  It's been tax code for nearly 20 yrs.
                You're deferring a percent of your salary into a retirement
                account sponsored by your employer and not being taxed on
                it until you withdraw.
            \_ Plus when they tax it after you retire, they'll apply a lower
               tax rate to your total contributions over the years plus any
               profit generated from investments with your contributions.
               \_ Not exactly. They'll apply whatever tax rate your income
                  would stipulate. If you become fabulously wealthy
                  between now and then, you could actually pay more taxes
                  at the time you withdraw it. --dim
          \_ What happens to my 401K account balance when I switch jobs?
                \_You can cash it out, in which case you lose a huge
                  chunk (~40%) of it due to taxes, or you can roll it
                  directly over to your IRA or new 401k, in which case
                  you wouldn't lose anything.  Or, depending on old company
                  policy, you can keep your 401k at that company, or the
                  company may cash it out for you automatically if you
                  don't roll it over by a certain time after you quit.
                        \_ If you roll it over into your IRA, does it
                           count toward your $2K/yr max contribution?
                           \_ No, it doesn't. That money has already been
                              tax deferred. The $2000/year limit is how
                              much taxable income you can squirrel away.
                              401k money isn't taxable income. --dim
                  \_ can you roll it into a Roth IRA, and get the money to
                     escape the tax man altogether?
                        \_No. The best you can do is roll it into a
                        an ordinary IRA and then convert it to Roth and
                        pay the taxes.  1998 is the best year to convert
                        as you can stretch the tax bill over four years.
          \_ At least where I work, you can put up to 20% in 401k, with the
             first 4.5% matched by the company. Putting as much into 401k
             is the best way to get the most money overall out of a company.
             \_ I think there's a limit of $15,000 per year imposed by
                the government. So, 20% of your income up to $15,000 is
                more correct. --dim
                \_ last time I checked it was $10 ...
                   \_ For 1998 it is $10K for most people.
                \_ does this 10k limit include employer contributed
                   portion?