401 (K) PLAN
Financial Dictionary — Pensions & Payroll
Definition
is a retirement plan in the United States that allows qualified employees to contribute money from their paychecks into a tax-sheltered account.
Detailed Explanation
A 401(k) plan is a U.S. defined contribution retirement plan that allows employees to contribute part of their salary (often with employer matching). Contributions may receive tax advantages depending on the plan type.
Common Uses
- Used to explain the concept in accounting and business contexts.
- Used when training staff or documenting procedures and policies.
- Used when training staff or documenting procedures and policies.
Practical Example
- Example: Teams reference **401 (K) PLAN** when defining terms in manuals, policies, or training materials.
Why This Term Matters
- Why it matters: Improves clarity and consistency across documentation and decision-making.