A 401(k) as well as 403(b) and 457 are "qualified" employer sponsored retirement plans, sometimes employers offer matching contributions up to a percentage of your salary. The money is pretax, a direct salary deduction, and stated on the W-2 issued by the employer. In 2015, you are allowed to contribute up to $18,000 of your income to a 401(k) and an additional $6,000 if you are over 50. The money in any of these retirement accounts and a traditional IRA can be deferred until you reach age 70 1/2. An IRA (Individual Retirement Account) is a self directed retirement account for people that work for companies that do not offer retirement plans that sometimes contains the rollover of a 401K and 403B when the employee changes jobs. For 2015 you can contribute $5,500 and $6,500 for those over 50. Legally, the 401(k) and 403(b) cannot be taken for debt or bankruptcy or tax liens because they are directly related to your wages and the law makes them untouchable; however, IRA's being self directed can be taken for any reason. You are in charge and you must self-direct the amount you want to withhold from the withdrawal of a traditional IRA account, where the government has laws in place that require at least 20% withholding on a withdrawal of a 401(k), 403(b), and 457 which are related to your wages. Please note that over the 30+ years that I have prepared taxes 20% withholding is not enough to pay the taxes you owe on the withdrawal of any retirement account at no matter what tax bracket you are in and especially if when you take the money you are not 59 1/2 because you would owe an additional 10% penalty for taking the money before the minimum age requirement for withdrawal.

If you take a required minimum, distribution from a 403b account over a period of more than 10 years there is NO required federal withholding tax. Taxpayer can have as much taken out as desired, including nothing.