A 401k plan is a qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers offering a 401k plan may but are not required to make matching contributions to the plan on behalf of eligible employees. Employers can also add profit-sharing feature to a 401k Plan. Earnings on pre-tax additions accrue on a tax-deferred basis. However, many 401k Plans offer post-tax investing and 401(k) Roth plans.
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