What Is a 401k?


A 401k is a retirement plan. It allows employees to contribute a certain percentage of salary earned into a tax-deferred account to save and invest for retirement. Some employers usually offer participants matching funds as part of a benefits package or company incentive.
3 Additional Answers
401k is a type of United States retirement savings account which takes its name from subsection 401(k) of the Internal Revenue Code which is title 26 of the United States Code. A contributor can start withdrawing funds after reaching the age of 59 1/2 years.
Used in the United States, the 401k is a saving plan for people who are retiring and want to have some money for their daily living when they leave employment. This type of saving plan is provided by the employer for his employee. A 401(k) or 401k retirement savings plan is funded by employee contributions and matching contributions from the employer. Contributions are made from the wages before taxes of the employee.
A 401k is a retirement investment plan for US workers.
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