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A 401(k) is an employer-sponsored retirement savings plan that offers tax advantages for saving toward retirement.
Contributions are made pre-tax, meaning they reduce your taxable income now—you'll pay taxes later when you withdraw in retirement. Many employers match a portion of your contributions, which is essentially free money.
For 2024, you can contribute up to \$23,000 (or \$30,500 if you're 50 or older). Withdrawing before age 59½ typically incurs a 10% penalty plus taxes, so this money is best left untouched until retirement.
Contributions are made pre-tax, meaning they reduce your taxable income now—you'll pay taxes later when you withdraw in retirement. Many employers match a portion of your contributions, which is essentially free money.
For 2024, you can contribute up to \$23,000 (or \$30,500 if you're 50 or older). Withdrawing before age 59½ typically incurs a 10% penalty plus taxes, so this money is best left untouched until retirement.