401(k) plans
Tax-deferred retirement accounts
401(k) plans are employer-sponsored retirement savings accounts in the United States, named after the section of tax code that created them.
Employees contribute a portion of their paycheck before taxes, often with employers matching some percentage.
The money grows tax-deferred until withdrawal in retirement: My company matches up to 6% of my 401(k) contributions.
- contribution limitsMaximums on donations allowed
- employer matchCompany duplicates worker savings
- automatic enrollmentDefault participation upon eligibility
- mutual fundsCollectively managed securities portfolios
- risk toleranceAcceptable level of uncertainty
compound interest · index funds · target date funds · retirement age · asset allocation · stocks · capital gains tax · taxable income · golden years · tax brackets · payroll deductions · tax credits · bonds · human resources policies · fiduciary responsibility · financial advisor · dollar-cost averaging · statement
- retirementretirement, retire, retirement age, retirees, retirement income
401(k) planspensions
Ongoing payments after employment
Social Security · pension funds · annuities · public sector pensions
401(k) planschecking accounts
Accessible bank funds
savings accounts · liquid assets · cash · cash on hand · money market accounts
401(k) plansSocial Security
Federal old-age insurance program
state pensions · public pensions · universal basic income · national insurance · welfare