401k

A 401(k) plan is an employer-sponsored, defined-contribution, personal pension account, as defined in subsection 401(k) of the US (IRS) Internal Revenue Code. Periodic employee contributions come directly out of their paychecks, and may be matched by an employer. Elective salary deferrals are excluded from the employee’s taxable income (except for designated Roth deferrals). Employers can contribute to employees’ accounts. Watch these FinStream TV streaming videos for free to learn more about 401k plans.