Review:
401(k) Plans
overall review score: 4.3
⭐⭐⭐⭐⭐
score is between 0 and 5
401(k) plans are retirement savings accounts sponsored by employers that allow employees to save and invest a portion of their paycheck before taxes are taken out.
Key Features
- Employer matching contributions
- Tax-deferred growth
- Investment options
- Portability
Pros
- Employer matching contributions can significantly boost savings
- Tax benefits allow for greater long-term growth potential
- Convenience of automatic paycheck deductions
Cons
- Limited investment options compared to individual retirement accounts (IRAs)
- Early withdrawal penalties and restrictions
- Potential for high fees depending on plan provider