Encyclopedia of Investment Terminology

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401k Plan

The 401(k) plan is one of the most popular types of retirement investments that a person can use. Deferred salary contributions are made on a basis that can involve taxes being deferred on the amount withheld from their paycheck. A personís employer can even match 401(k) deposits that the investor makes. There are limits based on how much can be deposited at one time into a plan and the money from this plan cannot be withdrawn without penalty until one reaches retirement age, except under very unusual circumstances.


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