What is a 401(k)?
A 401(k) is a tax-deferred savings plan for retirement. Contributions are deducted from an employee's gross pay and put into a 401(k) account. The maximum contribution an employee under 50 can make in 2016 is $18,000. If the employee is over 50 they may make an additional catch up contribution of $6,000. Learn more from the IRS here.