A 401(k) is a workplace retirement plan that lets you contribute a portion of your salary, often pre-tax, with the money growing tax-deferred until retirement. Many employers match part of your contribution — effectively free money.
Traditional 401(k) contributions reduce your taxable income now and are taxed on withdrawal; Roth 401(k) contributions are taxed now and withdrawn tax-free. Capturing the full employer match is usually the highest-priority step in any savings plan.
Related terms: RMD · Dollar-Cost Averaging