401(k) Plan

A 401(k) plan is a qualified retirement savings plan available to eligible employees of companies. It allows employees to defer taxes on a specific percentage of their income that they contribute toward retirement savings. Taxes on this deferred income, as well as any earnings generated by the account, are postponed until the funds are withdrawn, typically during retirement. Employers may match part or all of an employee’s contributions. Employees are responsible for selecting their investments and can benefit from direct tax savings.