What is a Lincoln 401(k) retirement plan?


Quick Answer

A Lincoln 401(k) plan is a retirement savings plan managed by Lincoln Financial Advisors. Lincoln Financial Advisors manages 401(k) plans on behalf of employers in order to provide employees with a method of setting funds aside for retirement, according to the company's website.

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Full Answer

An employer-sponsored retirement plan offers many benefits for employees including increased job satisfaction and productivity. Retirement plans are also an attractive benefit for recruiting potential employees and these plans save income taxes for employers, according to Lincoln Financial Advisors. Lincoln Financial Advisors offers pension plans and 401(k) plans, and provides assistance to employers in deciding between these options.

With a 401(k) plan, an employee contributes a portion of his income to the plan before taxes are removed. Employees are not required to pay taxes on these contributions until the funds are withdrawn. Tax law limits the amount that an employee can contribute to a 401(k) plan, as stated by Lincoln Financial Advisors. Employers also have the option to match employees' contributions to a 401(k) plan.

When an employee resigns, he may choose to move the funds from his 401(k) account with his previous employer into a rollover account at a discount brokerage or mutual fund company, reports CNN Money. An employee may also elect to move these funds into a retirement savings account with his new employer or to leave the money in his previous account. An employee may also elect to withdraw funds from his retirement account if he leaves a job; however, taxes are then assessed. Employees who take withdrawals before the age of 59 1/2 years are also subject to additional penalties. Lincoln Financial Advisors offers rollover 401(k) options, as well as advisement to help employees determine how to best manage retirement assets after a resignation.

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