401-k (Noun)
Meaning
A retirement savings plan that is funded by employee contributions and (often) matching contributions from the employer; contributions are made from your salary before taxes and the funds grow tax-free until they are withdrawn, at which point they can be converted into an IRA; funds can be transferred if you change employers and you can (to some extent) manage the investments yourself.
Classification
Nouns denoting cognitive processes and contents.
Examples
- Many employees choose to participate in their company's 401-k plan to save for retirement.
- When changing jobs, it's essential to consider what to do with your existing 401-k account, such as rolling it over into an IRA.
- Employers often match employee contributions to a 401-k plan as a benefit of working for the company.
- The company's 401-k plan allows employees to choose from various investment options to manage their retirement savings.
- By contributing a portion of each paycheck to her 401-k, Sarah can save money for retirement while also reducing her taxable income.