401k: Retirement Savings Plan Explained | Employee Contributions & Employer Matching

A 401k is a type of retirement savings plan offered by employers to their employees. Employees can contribute a portion of their salary on a pre-tax basis, meaning that they don't pay taxes on the money until they withdraw it during retirement. Employers may also contribute to the plan by matching a portion of the employee's contributions. The money in a 401k account is typically invested in a variety of mutual funds or other investment options, and the account balance grows over time. There are rules and restrictions regarding how and when money can be withdrawn from a 401k account.