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A 401(k) is an employer-sponsored retirement plan allowing pre-tax contributions, reducing current taxable income.
Many employers match contributions (free money!). Contribution limits are higher than IRAs ($23,000 in 2024).
Withdrawals are taxed as ordinary income. Early withdrawals face penalties.
Understanding 401(k) helps you make better investment decisions and plan for taxes. Explore related concepts below to deepen your knowledge.
