Skip to main content
  1. News
  2. Business & Finance
  3. Personal Finance

Understanding a 401(k)

See also


A 401(k) is a retirement plan that is provided by your employer, supporter, or sponsor. Unlike an automatic retirement plan, it is a plan that you make contributions to.

Cool feature

The cool thing about a 401(k) plan is that you get to choose how and where the money gets invested. You can put it into mutual funds and decide how much (by percentage) goes into each one. You can also switch the percentages around without having to be obligated to a certain fund.

Adding funds

The funds you place into your 401(k) are added from your paycheck before your pay is taxed. Just like an IRA, the money is not taxed until you withdraw it. Also, like an IRA, it is best to avoid withdrawing money from it until you are 59.5 years old to avoid being penalized.

Roth 401(k)

All of the above applies to a traditional 401(k). However, things are different with a Roth 401(k). With a Roth 401(k), taxes are taken out on your contributions as you make them. Therefore, when you retire and began withdrawing your money, you do not have to worry about paying taxes on it.



  •  One year later
    How victims have recovered a year after the Boston Marathon bombing
    Watch Video
  • Tax day freebies
    Everyone dreads tax day, but some businesses are offering deals today only
    Tax Day
  • Obamacare savings
    The rollout of Obamacare will cost $104 billion less than previously projected
    Top News
  • Blood Moon
    The first of four 'Blood Moons' came and went; is it the beginning of the end for mankind?
  • Arrest for threatening tweet
    A 14-year-old girl is arrested for issuing a threatening tweet towards American Airlines
    Strange News
  • Pistorius cross examination concludes
    Oscar Pistorius sheds more tears during the trial's final cross examination
    Watch Video

Related Videos:

  • April 15, tax day
    <div class="video-info" data-id="518196511" data-param-name="playList" data-provider="5min" data-url=""></div>
  • Cyber crooks already filing ‘your’ tax returns
    <div class="video-info" data-id="517264676" data-param-name="playList" data-provider="5min" data-url=""></div>
  • Protect your family
    <div class="video-info" data-id="517442471" data-param-name="playList" data-provider="5min" data-url=""></div>

User login

Log in
Sign in with your email and password. Or reset your password.
Write for us
Interested in becoming an Examiner and sharing your experience and passion? We're always looking for quality writers. Find out more about and apply today!