ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Investment
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401(K)
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Either A or B
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None of the above
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Detailed explanation-1: -A 401(k) Plan is a defined contribution plan that is a cash or deferred arrangement. Employees can elect to defer receiving a portion of their salary which is instead contributed on their behalf, before taxes, to the 401(k) plan.
Detailed explanation-2: -A 401(k) is a retirement savings and investing plan that employers offer. A 401(k) plan gives employees a tax break on money they contribute. Contributions are automatically withdrawn from employee paychecks and invested in funds of the employee’s choosing (from a list of available offerings).
Detailed explanation-3: -A 401(k) is an employer-sponsored retirement savings plan that offers significant tax benefits while helping you plan for the future. With a 401(k), an employee sets a percentage of their income to be automatically taken out of each paycheck and invested in their account.
Detailed explanation-4: -Employers have no legal obligation to offer a 401(k) plan for their workers, although many do.