A 401(k) is an employer-sponsored retirement account that lets you save from each paycheck with tax advantages. Contributions come out before taxes, reducing your current taxable income, and the investments inside grow tax-deferred until you withdraw. Many employers also offer a matching contribution, which is extra money from your employer. To maximize value, contribute at least enough to get the full match. Example (salary $60,000): you contribute 5% of pay ($3,000/year); employer matches 50% of the first 6% of salary (0.50 × $3,600 = $1,800); total annual contribution becomes $4,800. If the investments earn around 7% annually, that $4,800 per year could grow to roughly $450,000–$550,000 after 30 years. Practical steps: 1) Check if your employer offers a 401(k). 2) Contribute at least enough to capture the match. 3) Choose a simple, low-cost mix of funds. 4) Gradually increase your contribution rate over time (e.g., with raises). 5) Know the 2025 limits: deferral up to $23,000; catch-up $7,500 if you’re 50+. 6) Revisit and rebalance your investments yearly.

Definition: An employer match is when your employer contributes a certain percentage of your own 401(k) contributions, up to a limit. It’s extra money that boosts your retirement savings. To get the most from it, contribute at least enough to receive the full match.