| This is basically a retirement account set up
by your employer. A 401(k) plan allows you to designate a portion
of your monthly income to be put away for retirement, before you pay taxes
on it. There's a penalty for withdrawing the money before age 59
1/2, but you can often borrow from your 401(k) and repay it without a penalty.
Some companies have a matching program, which means they'll give you a
designated amount for every dollar you deposit. Within the account,
you can also choose how the money will be invested. You can ask that
your money be invested in your choice of stocks, bonds, CDs, mutual funds,
or other investments. |
It is similar to a 401(k), only it is for employees
of nonprofit institutions and schools. |