A defined contribution plan offered by a corporation to its employees, which allows employees to set aside tax-deferred income for retirement purposes, and in some cases employers will match their contribution dollar-for-dollar. Taking a distribution of the funds before a certain specified age will trigger a penalty tax. The name 401(k) comes from the IRS section describing the program.
Related information about 401(k) plan:
- 401(k) - Wikipedia, the free encyclopedia
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- Fidelity Investments - Workplace Savings: Welcome to 401k.com
Comprehensive information about 401(k)s from Fidelity.