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Glossary Finance

401(k)

A 401(k) is a US employer-sponsored retirement account to which you contribute from your paycheck, often with an employer match, and which grows tax-deferred.

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In more detail

Traditional contributions reduce taxable pay now and are taxed on withdrawal; Roth 401(k) contributions are taxed now and withdrawn tax-free. The yearly contribution limit and rules are set by law and change. Always capture the full employer match first. See How Retirement Savings Work.

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401(k) Calculator

Project your 401(k) balance at retirement, including your employee contributions, employer match, and optional annual raises.

See also

  • Glossary Roth IRA
    A Roth IRA is a US retirement account funded with after-tax money, whose growth and qualified withdrawals are tax-free.
  • Glossary IRA
    An IRA (individual retirement account) is a US personal retirement account with tax advantages that you open yourself.
  • Guide How Retirement Savings Work
    Regular saving, employer match, fees and inflation, traditional versus Roth, the 25x rule and 4% withdrawal test, annuities.
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