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What is a 401(k)?
Updated: Feb 23, 2022
It should really be called an Employer Sponsored Retirement Plan, because that’s what a 401(k) is—An account set up through your employer where you can put aside money for retirement directly from your paycheck, before it’s taxed.
A 401(k) (or a 403(b) for not-for-profits) is one of those perks that many companies offer employees—making it easier for their workers to save for retirement.
You are allowed to have both a 401(k) from an employer and an IRA yourself, which is good news!
There’s more to 401(k)s but that will be for another blog.
Do you have a 401(k) or 403(b) through your employer? Let me know in the comments!
As always, thanks for reading this!
And have you seen the new Pixar short film Twenty Something? In this interview, at 2:14 filmmaker Aphton Corbin talks about learning what a 401(k) is!
What is Money? is HERE
What is Investing? is HERE
What is The Investing Starter Kit? is HERE
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