401(k) Profit Sharing Plan

Written by True Tamplin, BSc, CEPF®

Reviewed by Editorial Team

Updated on March 29, 2023

In a 401(k) profit sharing plan, an employer sets aside a proportion of total profits each year to contribute to their employee's 401(k)s.

It is different from how employers match contributions in a traditional 401(k) because the employer has the freedom to choose how much, if anything, to contribute.

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About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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