401 (K)
A 401(k) is a U.S. workplace retirement plan that lets employees put part of their paycheck into an investment account before income tax is taken out. Many employers add a matching contribution. Earnings grow tax-deferred until withdrawal, usually in retirement. It is a defined contribution plan: the benefit depends on contributions and investment results, not on a promised pension amount.
Contributions made by an employer into a 401(k) are generally not taxable unless withdrawn before retirement.
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