Review:
401(k)
overall review score: 4.5
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score is between 0 and 5
A 401(k) is a retirement savings plan sponsored by an employer. It allows employees to save and invest a portion of their paycheck before taxes are taken out.
Key Features
- Employer-sponsored retirement savings plan
- Pre-tax contributions
- Tax-deferred investment growth
- Potential employer matching contributions
Pros
- Provides a tax-advantaged way to save for retirement
- Employer matching contributions can help boost savings
- Investment options allow for potential growth over time
Cons
- Limited investment options compared to other retirement accounts
- Early withdrawal penalties may apply in some cases
- Contributions are subject to annual limits