Can someone tell me what is a 401k?

Question

I keep hearing it on Friends - what is it???

Answer 1

it's the IRS code provision for retirement plans

your employer takes money from your paycheck and puts it in the plan, thus reducing your taxable income

Your employer contributes, matching a certain percentage of your u contribute 4% of pay, they contribute up to 3%

This money grows taxfree for your retirement

Taking your money out early--before age 59 1/2--causes you to lose at least 20% of your money--10%tax and 10% penalty

JOIN the 401k at work immediately you are eligible to do so  

Answer 2

It's a retirement plan through your employer, and it's never too early to start investing in it.

http://www.fool.com/money/401k/401k.htm

Answer 3

401k is a retirement investment account  

Answer 4

A waste of time...

Corporate ladder nonsense...

Watch this movie: http://www.storyofstuff.com

Answer 5

Saving and investments

and retirement plans etc

Answer 6

is te US retirement plan ..

each month a part of ur salary goes into a fund

kisses

Answer 7

a 401k is a personal retirement plan paid out of your payroll check through your employers pension fund. Sometimes the employer will match what you pay or they will sometimes pay this for you even if you dont participate in the plan yourself. It usually takes a certain amount of time that you can get this money out or it will be penalized and you will lose some of it if you are not vested with the company.  

Answer 8

A 401K is a deferred contribution type of pension plan. The money you put in the account is not taxed so your taxable salary is less and your tax liability is less.

Some employers will match what you put in up to a certain percentage of your salary. This is like a 100% return on your money immediately and a shame that most employees don't max out on at least this amount.

The money grows in the account without tax so it grows quickly.

Ok-so here's the downside. If you take money out of the account before you are 59.5 the penalties are severe. So this is definitely long term growth money.

Everyone should put in the maximum they can into these plans since who knows if Social security will be around.