401(k) Plan Financial Glossary

What is it? An employer-sponsored, tax-deferred, retirement savings plan funded by employees with contributions that are deducted from pre-tax pay. Employers frequently add matching contributions up to a set limit. Employees are responsible for managing the money themselves by allocating the funds among a selection of stock, bond, and cash investment funds. Investment gains are not taxed until the money is withdrawn.

Finance Term Definition Added By: Grace

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