Yes! You can use AI to fill out Qualified Retirement Plan and Trust Summary Plan Description

The main Summary Plan Description (SPD) is a generic document; all plan-specific rules like vesting schedules, eligibility, and contribution formulas are in a separate 'General Information Sheet'. Participants often overlook this critical attachment, leading them to misunderstand their own plan's features. This can result in incorrect assumptions about matching funds, vesting timelines, and eligibility, causing significant financial miscalculations. Always read the SPD and the General Information Sheet together as a single, comprehensive guide to your plan.

The IRS sets an annual limit for employee contributions that applies to all 401(k) plans an individual has, including those with previous employers in the same year. Participants who change jobs mid-year are especially prone to accidentally over-contributing. Exceeding the limit results in double taxation if the excess is not withdrawn by the deadline, eroding retirement savings. To avoid this, track your year-to-date contributions when starting a new job and adjust your deferral percentage accordingly.

Participants often forget to update their beneficiary information after major life events like marriage, divorce, or the birth of a child. The plan documents state a spouse is the automatic beneficiary unless they provide notarized consent to waive this right. Failure to update can result in retirement assets being paid to an unintended person, such as an ex-spouse, leading to legal disputes and financial hardship for your intended heirs. Review your beneficiaries annually and after any significant life change.

Many employees mistakenly believe all money in their 401(k) account is theirs immediately. While your own contributions are always 100% yours, employer matching and profit-sharing funds are subject to a vesting schedule, meaning you only gain full ownership after a certain period of service. Leaving a job before being fully vested means you forfeit the unvested portion of the employer's contributions, resulting in a smaller payout than expected. Always check the vesting schedule on your General Information Sheet to understand when you will own 100% of your employer's contributions.

When taking a distribution, participants often don't understand the difference between receiving a check themselves versus a direct rollover to another retirement account. Choosing to receive the payment directly triggers a mandatory 20% federal tax withholding, meaning you only receive 80% of your funds. To avoid taxes and penalties, you would then need to deposit the full 100% (including the 20% you didn't receive) into a new retirement account within 60 days. Always select the 'Direct Rollover' option on distribution forms to ensure a seamless, tax-free transfer of your entire balance.

The plan's loan rules are complex, limiting loans to 47.5% of the vested balance and detailing a significant processing fee that is either deducted from the proceeds or added to the loan principal. Participants often miscalculate their available loan amount or are surprised by receiving less cash than requested due to the fee. This can disrupt financial plans, such as a down payment for a home. Before applying, use the plan's online modeling tool and carefully read the fee disclosure to understand the true cost and net amount of the loan.

A 401(k) loan is typically due in full shortly after you terminate employment, a detail many borrowers overlook. If you cannot repay the outstanding balance, it is treated as a taxable distribution, and you will owe income tax plus a 10% early withdrawal penalty if you are under age 59.5. This can lead to a large, unexpected tax bill and the permanent loss of that retirement capital. Before taking a loan, understand the repayment terms upon termination and have a plan to repay it if you change jobs.

Participants experiencing financial distress may seek a hardship withdrawal without realizing the IRS has a very strict and limited list of qualifying events, such as specific medical expenses or preventing foreclosure. Applying for a non-qualifying reason, like paying off credit card debt, will result in a denied request, wasting valuable time when funds are needed urgently. Before applying, confirm your situation meets one of the specific criteria listed in the SPD and that you have exhausted all other options, including plan loans.

Distribution and loan forms are often complex, requiring notarized spousal consent, precise account information, and tax withholding elections. Since the provided document is a non-fillable PDF, the actual forms are likely prone to manual data entry errors, missing signatures, or incorrect selections. These mistakes lead to processing delays, with forms being rejected and returned, which is especially problematic when funds are needed for a time-sensitive event like a home closing. AI-powered tools like Instafill.ai can convert these documents into user-friendly fillable versions and validate information to prevent such errors.

The plan states that if a terminated participant with a vested balance between $1,000 and $7,000 fails to provide distribution instructions, the funds will be automatically rolled into an IRA chosen by the plan administrator. Many people are unaware of this and lose track of these small, scattered IRAs, which are often invested in low-yield funds and eroded by maintenance fees. To avoid this, always provide explicit distribution instructions for your 401(k) when you leave a job, consolidating your retirement assets into a single IRA or your new employer's plan.