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401(k)

An employer-sponsored retirement account with pre-tax (traditional) or after-tax (Roth) contributions.

Why it matters

2025 contribution limit: $23,500 (plus $7,500 catch-up for age 50+, and a new $11,250 catch-up for ages 60–63). Employer matches don't count against the limit. Money grows tax-deferred (traditional) or tax-free (Roth). Withdrawals before 59½ typically incur a 10% penalty plus taxes.

See also

Educational only — not financial, tax, or legal advice.