401a Calculator

Shawn Plummer

CEO, The Annuity Expert

401a Savings Calculator

Use our 401(a) savings calculator to estimate your retirement savings. Input your annual contribution limits, maximum employer matching contributions, and assumed annual rate of return.

Helpful Tool: How Much Will My 401A Pay Me Per Month

What Is A 401(a) Plan?

A 401(a) is a type of employer-sponsored retirement plan that allows for contributions from the employer, employee, or both in the form of either percentages or fixed dollar amounts. The company that offers 401 (a) establishes eligibility and vesting schedules. Employees can choose to withdraw their money from a 401(a) by transferring it to another qualified retirement plan (rollover), taking all funds at once as a lump sum payment, or receiving it gradually over time through an annuity.

401A Withdrawal Calculator

How Does A 401(a) Retirement Plan Work?

There are a variety of retirement plans that employers can offer their employees, each with different features and restrictions. Some retirement plans may be better suited for certain types of employers.

A 401(a) plan is a retirement savings plan commonly offered by employers to eligible employees. Employees who typically participate in the 401(a) plan work for government agencies, educational institutions, and non-profit organizations. This includes but is not limited to: government employees, teachers, administrators, and support staff.

The features of a 401(a) plan are nearly identical to that of a 401k plan, which is more common in for-profit industries. The one exception is that employees cannot contribute to their 401k plans through payroll deductions.

If an individual leaves an employer, they can still maintain ownership of the funds by transferring them into a different 401k plan or individual retirement account (IRA).

Employers can have several 401(a) plans with varying eligibility requirements, contribution levels, and vesting schedules. Employers set up these plans to incentivize employee retention. The employer manages the plan and sets how much employees can contribute.

The minimum requirement to participate in a 401(a) plan is usually two years of employment and 21 years old; however, this can differ.

Related Reading: 401a vs 403b

401A Retirement Plan

401(a) Plan Contributions

An employer-sponsored 401(a) retirement savings plan. This type of account may have after-tax or pre-tax contributions, which the employer gets to decide. The employer also sets up how much they will contribute on behalf of each employee. Some common options include a set amount deposited into an employee’s account, matching fixed percentages of employee contributions, or dollar-for-dollar matches within a designated range.

Most voluntary 401(a) plan contributions people make are limited to 25% of what they earn in a year.

Investing In A 401(a) Plan

Employers who choose 401(a) have greater command over where their employees invest. Government employers often restrict investment opportunities to only the safest and most secure options to reduce the chance of risk. A 401(a), while it does guarantee retirement savings, necessitates the employee taking care to reach retirement goals.

401A Hardship Withdrawal

401(a) Plan Withdrawals And Vesting Schedules

Any 401(a) employee contributions and the earnings on those contributions are immediately fully vested. However, employer vesting schedules for full rights to the company’s matching 401k contributions usually depend on years of service as an incentive for employees to stay with the business.

Employees will face income tax withholdings and a 10% early withdrawal penalty from the Internal Revenue Service (IRS) if the employee is younger than 59½, passes away, becomes disabled, or rolls over the 401(a) into a qualified IRA or retirement plan through a direct trustee-to-trustee transfer when they withdraw from their plan.

Tax Credits

Contributing to a 401(a) plan could make you eligible for a tax credit. And it’s possible to have both a 401(a) and an IRA simultaneously. With that said, though, your traditional IRA contributions might not qualify for the same tax benefits if you already have a 401(a). This is all contingent on your adjusted gross income.

Next Steps

As retirement age approaches, many people worry about how they will withdraw from their retirement savings plan. One option that can provide peace of mind is an annuity with a guaranteed lifetime withdrawal benefit (GLWB). Contact us today if you want more information on 401(a)s or want to get a quote for an annuity with a GLWB. Our team would be happy to help you plan for your future.

401A Calculator

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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