Bull market news! Trump signs an executive order allowing $9 trillion of U.S. 401k retirement funds to invest in cryptocurrencies!
Highly recommended, the only dog-themed meme coin in Trump's track — Hero Dog Conan! The fastest and most convenient channel for a turnaround in the crypto world!
Many people are curious, what is a 401K retirement fund?
A tax-deferred retirement plan established in 1981, with relevant regulations in Section 401 of the Internal Revenue Code, hence the name 401K.
401K is applicable to employees of private companies and is a corporate supplementary pension insurance system contributed by both employers and employees. It has become the main retirement plan for employees in private companies in the United States.
Employers will set up a 401K account for each employee, and employees can contribute a certain percentage of their salary (about 1% to 15% of their salary, not exceeding the limit) to that account each month. Employers will also match a certain percentage of the amount to the employee's 401K account.
The money put into the 401K account does not need to be reported for tax purposes; only when employees withdraw at the specified age does it count as income that needs to be reported for personal income tax.
●Current 401K scale: Approximately $9 trillion, with financial products available for purchase:
1. Stocks cannot be purchased or invested separately.
2. Optional financial products can only come from the 401k fund management companies chosen by the employer. The recent executive order by Trump allows 401k retirement funds to invest in cryptocurrencies!
In fact, it's not your own choice; risk preference and specific product selection are also not something you can determine. You can only choose based on the products offered by the fund companies locked in by your employer within a limited range.
●Annual contribution limit: In 2025, the limit for contributions to the 401(k) plan has been further increased to $23,500, an increase of $500 from the previous year.
●Eligibility: The company has providers, and there are no special restrictions on income.
●Benefits: Tax deferral, exemption from income tax on interest, dividends, and investment gains within the account.
●Minimum withdrawal age restriction: Withdrawals can be made after age 59.5, and early withdrawals will incur a 10% penalty.
●Mandatory withdrawal age: After turning 70.5 years old, a portion of the funds must be withdrawn each year, and no further contributions can be made; otherwise, penalties will occur (this is mainly to stimulate consumption).
●Special situations for early withdrawal: Payment of large medical bills / becoming disabled / unemployed for 12 weeks can withdraw to pay health insurance premiums / account holder's death / leaving a job after age 55, being laid off, dismissed, or retiring early.
●You can apply for a loan from your own 401K account, but the downside is that you have to pay taxes twice (the amount returned to the 401K account is after-tax income, and you will have to pay taxes again when you withdraw in the future). The loan interest is also not tax-deductible, whereas the interest on a bank loan can be deducted.
●The 401K account belongs to the employee, and when leaving the job, the employee can transfer it to their own IRA account or transfer it to the designated 401K plan fund company of the next company.
