What to Know About a

A 401(k) plan is a retirement savings plan sponsored by an employer. It allows employees to contribute a portion of their salary to a tax-advantaged account, where the money can grow tax-free until it is withdrawn in retirement.

401(k) plans are popular with employees because they offer a number of advantages, including:

* Tax advantages: Contributions to a 401(k) plan are made with pre-tax dollars, which reduces your taxable income. This means that you can contribute more money to your retirement savings without reducing your current take-home pay.

* Matching contributions: Many employers offer matching contributions to their employees' 401(k) plans. This means that your employer will contribute a certain amount of money to your account each year, up to a specified limit. Matching contributions are a great way to boost your retirement savings and reach your goals sooner.

* Employer-sponsored investment options: 401(k) plans typically offer a variety of investment options, such as stocks, bonds, and mutual funds. This gives you the opportunity to choose the investments that are best suited for your individual risk tolerance and time horizon.

* Portability: 401(k) plans are portable, which means that you can take your account with you if you change jobs. This makes it easy to maintain your retirement savings and stay on track for your goals.

401(k) plans are a valuable tool for retirement savings. If your employer offers a 401(k) plan, it is a great idea to take advantage of it. By contributing regularly to your 401(k) plan, you can save for a secure retirement and reach your financial goals.

Here are some additional things to know about 401(k) plans:

* Contribution limits: The maximum amount that you can contribute to your 401(k) plan each year is $22,500 ($30,000 if you are 50 or older).

* Withdrawal rules: You can withdraw money from your 401(k) plan without penalty once you reach age 59½. However, you may be subject to a 10% early withdrawal penalty if you withdraw money before age 59½.

* Required minimum distributions: You must start taking required minimum distributions (RMDs) from your 401(k) plan once you reach age 72. RMDs are a percentage of your account balance, and they increase each year.

If you have any questions about your 401(k) plan, you should contact your employer's human resources department or the financial institution that administers your plan.