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A 401(k) is a type of qualified profit-sharing plan, which allows eligible employees of an employer to set aside a portion of their current taxable pay to a tax-sheltered retirement fund. The plan is funded by the contributions made by the employee and, in some cases, the employer. The advantages of participating in a 401(k) plan are enormous. Here are some examples.
Offering a retirement plan can be one of the most challenging, yet rewarding decisions an employer can make. The employees, their beneficiaries, and the employer all benefit when a retirement plan is in place.