401(k) Plans: Overview and How They Work

After more than 30 years guiding clients at Neasham Insurance Agency, I’ve seen just how important it is to understand your retirement options. A 401(k) is an employer-sponsored plan where your pre-tax contributions can grow tax-deferred, helping you build for the future. For 2026, the contribution limit is $24,500, with additional catch-up contributions available if you’re 50 or older. Keep in mind, early withdrawals come with penalties, and if you have a traditional 401(k), required minimum distributions begin at age 73. Knowing how these details fit into your overall retirement picture is key—just as I do with annuities and universal life, making sure each piece works together for your long-term security.