401 (K) Retirement Plan

401 (k) plan is a retirement plan offered to you through your employer. 401 (k) plans are the most common kind of defined contribution retirement plan.

The employee third party chooses to allocate a percentage of their income which is typically matched by the employer (usually up to a limit) and these funds are managed by a third-party administrator (financial institution).

Many contribution plans come with a bonus. The match can often be 50 cents to a dollar for every dollar you contribute, up to a set maximum. Perhaps 3% to 6% of your salary.

Any money you contribute from your paycheck is always 100% yours; company matches funds usually vest over time –typically 25% or 33% a year or all at once for 3 or 4 years.