Not So Fast Buster

June 1997
Journal of Financial Planning;Jun97, Vol. 10 Issue 3, p16
Academic Journal
The article discusses the possibility of avoiding the pre-tax deferral cap on 401K accounts by not taking a vacation and having unused vacation pay put into one's retirement account. An article by Mary Ellen Kazimer published in the January 13, 1997 issue of the journal "Pension & Benefits" is cited as reporting that before circumventing the pre-tax deferral cap, first, the company must have a use-it-or-lose-it vacation policy. Kazimer also noted that the employer would have to subject the vacation pay contributions to complex nondiscrimination testing.


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