408(k) plan

Definition

A simpler alternative to a 401(k) plan available only to companies with 25 or fewer employees, which gives employees the opportunity to make contributions to their SEP accounts with pre-tax dollars and reduce their current year's net income. also called 408(k) plan. also called Salary Reduction Simplified Employee Pension (SARSEP) Plan.

Use 408(k) plan in a sentence

You may want to try and get a 408 plan so that you know you will be covered in the future.

​ Was this Helpful? YES  NO 3 people found this helpful.

The 408 plan was a lot better than the 401 k plan because I understood it better and I thought it was a better decision.

​ Was this Helpful? YES  NO 8 people found this helpful.

Since Joe's company only had 20 employees, he decided to use a 408 plan instead of a 401(k) as it was both simpler and allowed him to save more money while still providing his employees with benefits.

​ Was this Helpful? YES  NO 6 people found this helpful.

Show more usage examples...

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
403(b) plan Salary Reduction Simplified Employee Pension Plan