A 401(k) lets employees contribute pre-tax (traditional) or post-tax (Roth) dollars to a retirement portfolio. Many employers match a percentage of contributions — an immediate, risk-free return.
Contribution limits are set annually. Fees and fund choice inside the plan vary widely; always check the expense ratios of the funds you pick.
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Open Financial OS →Frequently asked questions
Should I contribute at least the match?
Yes — employer matches are effectively free money that vests over time. Missing them is one of the most common financial mistakes.
Related terms
IRA (individual retirement account)
A US tax-advantaged retirement account you open on your own, separate from an employer plan.
Tax-advantaged account
An account that lets investments grow with reduced or deferred tax.
Retirement
The stage of life when you have enough savings and income to make paid work optional.