401(k)
A US employer-sponsored retirement account funded with pre-tax (or Roth) payroll contributions, often with an employer match.
A 401(k) lets US employees contribute directly from their paycheck into a tax-advantaged retirement account, up to an annual IRS limit, often with the employer matching a portion of contributions. Traditional 401(k) contributions reduce taxable income now and are taxed on withdrawal; Roth 401(k) contributions are taxed now and grow tax-free.
Worked Example
Contributing 6% of a $70,000 salary ($4,200/year) into a 401(k) with a 100% employer match up to 6% adds another $4,200 from the employer — an immediate, guaranteed 100% return on that portion, before any market growth.
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