What is 401(k) plan?

A 401(k) is a US workplace retirement plan. Employees can have part of their pay put into individual accounts, either pre-tax, which is taxed on withdrawal, or as designated Roth deferrals, which are taxed now and can come out tax-free if qualified. Employers can add contributions such as a match.

Why 401(k) plan matters

It is the main retirement account for many US workers, and the employer contribution is money that is not available outside the plan.

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