401k Plans Help Employees Plan for Retirement
A 401k plan is a retirement savings plan for a company’s employees where they can save money for the future. Under a 401k plan this money is a tax deferred contribution plan that employees can choose to add money to and that money in turn gains varying amounts of interest over the years, thus adding to the employee’s retirement savings.
Since a 401k plan is money saved prior to being taxed, the thought is that it will save people because they won’t have to pay taxes on it before they take money out when they retire. Sometimes they are called a Thrift Savings Plan. With some plans, the employer contributes by matching the funds put in by an employer, while in others, they don’t do so.