A 401k is a retirement savings plan offered by many employers. It allows you to save a portion of your income on a pre-tax basis, and your employer may even offer to match a percentage of your contributions. The money in your 401k grows tax-free until you withdraw it at retirement age.
When you enroll in a 401k plan, you’ll be given a variety of investment options to choose from. These may include mutual funds, exchange-traded funds (ETFs), and individual stocks. Your employer may also offer a target-date fund, which automatically adjusts the mix of investments based on your projected retirement date.