A 401k plan is an employer-sponsored retirement plan that allows you to save for retirement through a tax-deferred account. Your employer may encourage you to save by matching some or all of the funds that they put into your 401k retirement plan.
If you’re self-employed, you can also set up a 401k plan to save for retirement.
401k retirement plans are the result of the 1978 Tax Reform Act that allows Americans to lower their taxes while they save for retirement at the same time.
The name 401k came from Section 401 Paragraph K of the Internal Revenue Code.
This plan went into effect in 1982 when the first taxpayers were able to take advantage of it. The plan with all of its regulations was published in 1991.
Now that you’ve had a history lesson, I’m going to walk you through the types of retirement plans available to you, how to manage these plans, and changes that have come throughout the years
Read more: 401k Retirement Plans: What You Need To Know About Your 401k Benefits