401 (K)

A 401(k) plan is a retirement plan offered to you through your employer. 401(k) plans are the most common kind of defined contribution retirement plan.

An employee chooses to allocate a percentage of their income, which is typically matched by the employer (usually up to a limit), and these funds are managed by a third-party administrator (a financial institution).

Many contribution plans come with a bonus. The match can often be 50 cents to a dollar for every dollar you contribute, up to a set maximum. Perhaps 3% to 6% of your salary

Any money you contribute from your paycheck is always 100% yours; company match funds usually vest over time—typically 25% or 33% a year or all at once at 3 or 4 years.