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Retirement & Benefits

401(k)

Also called: 401k, 401(k) plan, workplace pension

A 401(k) is a US workplace retirement plan funded by payroll deductions, usually with an employer match and a tax break on contributions. Traditional contributions cut this year's taxable income and are taxed on withdrawal; Roth contributions do the reverse. Its structural weaknesses are a menu chosen by your employer and fees you didn't negotiate, which is why checking the expense ratios of the funds on offer is the highest-value hour you'll spend on it.

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