401(k) Plan

A 401(K) plan is a retirement plan that allows employees to deposit a fix amount of their income and defers taxes until it’s withdrawn. Ideally employees will withdraw their assets after they retire. If an employee withdraws their assets before retiring then they are subjected to a penalty fee. There are plans that allow employees to direct their 401(k) capital to specific groups of investment products. If not, the employer would have a professional who will manage employees’ investments.