Before diving into strategies, it’s important to understand what a 401(k) is and how it works. A 401(k) is a tax-advantaged retirement savings plan, usually offered by employers. Contributions are made pre-tax, reducing your taxable income. Over time, these investments grow tax-deferred, meaning you don’t pay taxes on the gains until you withdraw the money, typically in retirement.
Actionable Tip: Review your plan’s details. Understand contribution limits, the range of investment options offered, and any rules specific to your plan.