401(k)

Definitions

A tax-qualified, defined-contribution pension account.

US

Examples

“Entrepreneurs have⟳ responded enthusiastically: Solo 401(k) assets now stand⟳ at $2.5 billion, and could hit $90 billion by 2012. It's easy to see⟳ why the plans are becoming so popular. As with ordinary 401(k)s, as well as SEP-IRAs designed for the self-employed, individual 401(k)s allow⟳ you to invest⟳ a portion of your income on a pretax basis—and your contributions grow⟳ tax-deferred.”

“John Fuchs was checking his 401(k) account online one afternoon when he saw⟳ something that seemed amiss.”

“Contribute⟳ 10 percent of your salary each month to your 401(k), and you're good. Start⟳ at age 25 making $50,000 a year, and earn⟳ a 3 percent annual raise⟳ until retirement.”

CEFR level