A 401(k) plan is a type of retirement savings plan offered by many employers in the United States. It allows employees to save and invest a portion of their salary before taxes are taken out. This means that the money that goes into a 401(k) plan reduces the employee’s taxable income, which can lead to significant tax savings.
Most 401(k) plans also offer some form of matching contribution from the employer, which can help to increase the savings of the employee. The funds in a 401(k) plan are typically invested in a range of financial products such as stocks, bonds, and mutual funds, and the money can be accessed by the employee when they reach retirement age.