A 401(k) plan allows participants to make tax-deferred contributions each pay period, which are then invested and potentially grow usually until retirement. The Maryland State Retirement Plans (MSRP) 401(k) Savings and Investment Plan allows State employees to get the same benefit, through a program that’s specifically tailored to the needs of Maryland public employees.
When you contribute to the MSRP 401(k) plan, the money is not taxed until it is withdrawn – usually in retirement, when you may be in a lower tax bracket. To contribute even more to your retirement plan, you may contribute to an after-tax Roth 401(k) along with your 457(b) retirement plan. Roth 401(k) investment earnings may be taken tax-free in retirement as long as certain requirements are met.
Remember, investing involves market risk, including the possible loss of the money you’ve saved. As you get started in the plan, we’ll help you understand market risk and strategies that may help you deal with it.
Additional 401k features
In addition to tax-deferred investing, the MSRP 401k plan also offers these features, and more:
- Contributions to more than one plan at a time – you may contribute to a 401k while also contributing to a 457(b) and/or a 403(b) Plan (if you work for a State educational institution), as long as you don’t exceed the current IRS contribution limits. See the plan comparison chart (PDF) for details.
- Catch-up contributions – you can take advantage of the age 50 or older catch-up contribution option to invest more in your plan.
- Rollovers – you can roll money into your 401k plan from other qualified retirement plans. Also, upon leaving State employment, you can roll your money into another qualified retirement plan. See the plan comparison chart (PDF) for more information.
- Loans – as long as certain qualifications are met, you may be eligible for a loan. You are obligated to pay it back, with interest.
- Hardship withdrawals – you may take a hardship withdrawal from your plan, as long as certain qualifications are met.
For a complete look at all of the MSRP 401k plan features, benefits and restrictions take a look at the plan comparison chart (PDF).
Qualified retirement plans, deferred compensation plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59 ½. Neither Nationwide nor any of its representatives give legal or tax advice. Please contact your legal or tax advisor for such advice.
Get the help you need
Talk to one of our Team MSRP Retirement Specialists if you have questions about plan options.