401(k) explained: What is it? Types, contribution limits, rollover rules, options after job change
Mint·3h ago·Neutral
What Happened
A 401(k) is a US employer-sponsored retirement savings plan allowing employees to invest pre-tax salary portions for long-term growth. Two types exist: Traditional 401(k) with pre-tax contributions and taxable withdrawals, and Roth 401(k) with after-tax contributions and tax-free qualified withdrawals. Employer matching contributions enhance savings. Choice depends on expected future tax brackets and personal preferences.
Key Entities
401(k) planTraditional 401(k)Roth 401(k)Retirement savingsEmployer matchingTax-advantagedUnited States