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The
401(k) plan is a type of retirement plan available in the United
States. The 401K plan is named after a section of the 1978 Internal
Revenue Code. A 401(k) is an employer-sponsored qualified retirement
savings plan. It allows you to save for your retirement while
deferring any immediate income taxes on the money you save or their
respective earnings until withdrawn.
The
401K plan may also include matching contributions by the company.
Many 401(k)s invest in the company's own stock; if the company
performs poorly you could lose both your job and your retirement
savings. Professionals recommend diversifying your retirement
account if you take advantage of a 401(k).
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