401K Financial Glossary

What is it? A voluntary retirement plan offered to employees of a company that allows up to a certain percentage of their pretax pay to be set aside and invested within the retirement plan. The percentage varies from company to company and can increase each year. The employer can also contribute to the employees plan if they wish. The funds and the growth are not taxed until the funds are withdrawn. There are restrictions as to when and how you can withdraw these funds without penalties.

Finance Term Definition Added By: Kaylee

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