401k

What is a 401(k)?

• A type of savings account for short-term goals.

• A common retirement savings account set up by an employer.

• An investment account for purchasing real estate.

• A government-sponsored health insurance plan.

What is a tax advantage of contributing to a 401(k)?

• Contributions are taxed immediately.

• Contributions are tax-deductible, reducing current taxable income.

• Withdrawals are always tax-free.

• Only the employer's contributions are tax-deductible.