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Benefits Beginner: Introduction to 401(k) Plans

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1.
There are situations in which a 401(k) rollover may result in you having to pay taxes.
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True. If you don't roll over all of it, or if you don't place the funds into the new account within 60 days, you can be taxed on the amount that is not rolled over.
2.
Which type of 401(k) rollover is not allowed?
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Traditional 401(k) to a Roth 401(k). The others are allowed.
3.
Distributions from a 401(k) plan are allowed for all of the following except _______.
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First-time home purchase. Distributions are not allowed for a first-time home purchase.
4.
If an employee defers 8 percent of his or her wages into a 401(k) plan, and the employer contributes an additional 3 percent, the employer is making a matching contribution.
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True. The employer is making a matching contribution.
5.
If your employer matches your contributions to your Roth 401(k), those employer contributions are _______.
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Pre-tax. Despite the Roth 401(k)'s purpose, these matches are actually pre-tax; but when you withdraw them, they will be taxed.
6.
Who may deduct 401(k) contributions on their income tax returns?
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Employers. Only the employers may deduct contributions to a 401(k) plan--employee contributions are not reported as taxable income when deducted.
7.
In a SIMPLE 401(k) plan, the employer may make either matching or non-matching contributions.
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True. The employer is allowed to choose an option.