| Active Participant - 401(k)
Retirement Glossary & Terminologies
An active participant is someone who actively contributes to a 401(k)
or any other qualified retirement plan or an investor who receives
benefits under an employer sponsored plan. The importance of being
an active participant is that an individual’s eligibility
to make a deduction off of his income tax return for contribution
to a traditional 401(k) plan or an IRA depends on the active status.
An investor is considered an ‘active participant’ if
he contributes to any of the following qualified retirement plans
in a given year:
- A 403(b) or qualified annuity plan
- A qualified traditional 401(k) plan including
profit-sharing plans, money purchase pension plans, stock bonus
or defined benefit plan.
- SEP IRA
- Simple IRA
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