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How can you make money through 401 k?

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Wiki User
2008-04-22 00:22:16

This is a profit sharing plan where the employee designates a

certain percentage or dollar amount of his/her paycheck as a

'pre-tax' deduction that goes into an IRS approved 401k plan. It

makes money from earned interest or from corporate matches.

If any funds are removed before a certain age, an automatic 20%

is withheld for Federal tax and an additional 10% penalty for

withdrawal before age 59-1/2.

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