401(k) plan

401(k) plan,

Definition of 401(k) plan:

  1. Employer-sponsored employee benefit scheme supported by the US tax code. Under this plan, a limited amount of an employees before-tax salary is deposited into tax-deferred retirement plan where it accumulate free of tax. Withdrawals by the employee before he or she reaches the age of 59½ years attract penalties except in certain cases of hardship.

Meaning of 401(k) plan & 401(k) plan Definition