401(k) Plans

A 401(k) plan is a retirement savings option offered by employers that allows employees to contribute a portion of their salary before taxes are taken out. This money is invested and can grow tax-deferred until retirement, when it's withdrawn and taxed as income. Employers often match a portion of employee contributions, adding extra savings. The plan is named after a section of the U.S. tax code. It’s a key component of employee benefits, promoting long-term savings for retirement while providing tax advantages to both the employee and employer.