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What is a 401(k) Plan?
A 401(k) plan is a retirement savings program offered by many employers. It allows employees to contribute a portion of their salary before taxes are taken out, and the money grows tax-free until it is withdrawn in retirement. Most plans also allow for employer contributions, which can be matched or contributed regardless of employee participation. The goal of this type of plan is to help employees save for retirement and build wealth over time through compound interest on their investments. Funds from the plan can be used to purchase stocks, bonds, mutual funds and other types of investments as chosen by the participant in order to reach their financial goals.
