401(k) / Retirement Plan Basics: Who Qualifies and What You Get
Learn how employer-sponsored 401(k) plans work, how they help you save for retirement, and how to avoid missing out on employer matches.
A 401(k) is a type of retirement savings plan offered by employers to help employees build wealth for their future.
Who it's for
This scheme is available to employees who have access to a retirement plan sponsored by their employer.
What you get
You receive a way to save money for retirement that comes with tax advantages. This allows you to grow your savings more efficiently than a standard bank account.
What it costs you
The cost to you is the money you choose to contribute from your paycheck. Please note that there are annual limits on how much total money you are allowed to contribute each year.
The catch to know
Many employers offer a "match," which is extra money they contribute to your account if you contribute yourself. If you do not contribute enough to receive the full match, you are essentially leaving free money on the table.
How to apply
- Check with your employer to see if they offer a retirement plan.
- Decide how much of your paycheck you want to contribute.
- Set up your contributions through your company's HR or benefits portal.
- Review your investment choices to ensure they align with your long-term goals.
For more information, visit https://www.dol.gov/general/topic/retirement