A 401-k is a type of retirement account that is offered by an employer. It is a way to save money for when you stop working and want to retire.
When you start working at a job that offers a 401-k, your employer will often give you the option to sign up for one. It’s also possible that they may automatically enroll you in one. Once you are enrolled, you can choose how much money you want to put into your 401-k each month. This money will come out of your paycheck before you even see it.
The great thing about 401-k’s is that the money you put into them is not taxed until you take it out. This means that you can save more money because you don’t have to pay taxes on it right away.
Another great thing about 401-k’s is that your employer might match some of the money that you put in. This is like free money! If your employer offers a match, make sure you put in enough money to get the full match.
When you retire and want to take money out of your 401-k, you will have to pay taxes on it. But by then, you will probably be in a lower tax bracket so it won’t be as much as it would have been if you had paid taxes on it while you were working.
Overall, 401-k’s are a great way to save money for retirement. They let you save money without paying taxes right away and your employer might even match some of the money you put in. If your employer offers a 401-k, make sure you sign up for one and put in as much money as you can to get the full match.
