Is a 401(k) a good retirement plan?

Since its inception in 1978, the 401 (k) plan has become the most popular type of employer-sponsored retirement plan in America. Millions of workers depend on the money they invest in these plans to provide for them in their retirement years and, for many, it's a key benefit of the job.

What is a 401(k) plan?

A 401 (k) plan is a company-sponsored retirement account in which employees can contribute a percentage of their income. Employers often offer to match at least some of these contributions. There are two basic types of 401 (k)s—traditional and Roth—which differ primarily in how they're taxed.

Do you have a 401(k)?

Initially offered by employers to supplement other employee benefits, 401 (k)s have become the most common private employer-sponsored retirement program in the U.S. About a third of working-age Americans have a 401 (k), compared with one in nine who have a defined benefit pension plan.