A 401(k) is an employer-sponsored retirement savings plan that allows employees to contribute a portion of their paycheck to an individual retirement account.
Depending on the plan, contributions may be made on a pre-tax basis or as Roth contributions. Employers may also contribute to the account, such as through a match or other employer contribution.
In general, investment earnings grow over time, and distributions are typically taxed when withdrawn in retirement unless they are qualified distributions from a Roth account.
How is this different from Student Loan Payment Verification?
A 401(k) is a retirement savings benefit.
Student Loan Payment Verification is a separate employer benefit that allows SoFi to verify eligible student loan payments made during your employer’s benefit period. Your employer may then use that verified payment information to determine whether you qualify for a potential 401(k) match.
In other words:
- A 401(k) is the retirement account itself
- Student Loan Payment Verification is the process used to confirm eligible student loan payments for employers that offer a student-loan-based 401(k) match benefit
Have more questions? Chat with us or call 855-456-7634 to speak with an agent.