A 401(k) is a retirement savings plan offered by many employers in the United States. It allows employees to contribute a portion of their pre-tax earnings to an investment account.
Employers may also match a portion of these contributions. The funds in a 401(k) account are typically invested in a range of investment options, such as stocks and bonds.
These contributions grow tax-deferred until retirement, at which point they can be withdrawn, often with tax advantages. 401(k) plans are a common tool for retirement savings and long-term financial planning.