401(k) Investing

Employer Match & Tax Savings

The 401(k) is the standard employer-sponsored retirement plan in the US.

The "Free Money" Match

Most companies offer a "match" (e.g., if you contribute 6%, they also give you 6%). This is literally free money and is the first thing you should maximize.

Traditional vs. Roth

• Traditional 401(k): Contributions are made pre-tax (lowers today's taxes). You pay taxes when you withdraw in retirement.
• Roth 401(k): Contributions are made after-tax. You pay no taxes when you withdraw in retirement.

Wait for Vesting: Check your company's "vesting schedule." If you leave the company too early, you might not get to keep all of the employer's matching contributions.