Married to the Plan: The Lifetime Commitment of a Money Purchase 401(h)
Discover the Money Purchase 401(h), a specialized retiree medical plan often paired with defined benefit plans. Learn how it offers tax-advantaged healthcare savings for life.
What is a Money Purchase 401(h) Plan?
A Money Purchase 401(h) is a specialized component of a qualified retirement plan designed specifically to provide tax-advantaged funding for retiree medical benefits. It allows for significant contributions toward healthcare expenses in retirement, separate from your regular retirement savings.
Unlike traditional 401(k)s or even many pension plans that focus solely on retirement income, the 401(h) portion is explicitly earmarked for medical costs. This makes it a powerful tool for individuals, especially business owners and highly compensated professionals, to bolster their financial security in their later years, particularly concerning the ever-rising cost of healthcare.
Frequently asked questions
Availability, tax treatment, and plan design depend on the facts and circumstances of the employer, plan document, participant group, and applicable law. 401h.com provides general educational information only — not tax, legal, actuarial, investment, or ERISA advice. Consult qualified tax, legal, actuarial, and plan professionals.
401h.com Editorial
401h.com
The 401h.com editorial team publishes plain-English explainers on 401(h) retiree medical benefit plans. Educational only — not tax, legal, actuarial, investment, or ERISA advice.
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