human
I'm a little confused about the different types of 401k plans. Can you help?
assistant
Yes, I can help! The most common type of 401k plan is a Traditional 401k plan, which allows employees to save pre-tax money and have it grow tax-deferred. A Roth 401k plan works similarly but contributions are made with after-tax dollars and withdrawals are not subject to taxes until withdrawal. Another option is an SEP IRA, or Simplified Employee Pension Individual Retirement Account, which is a retirement savings plan for self-employed individuals. It offers similar benefits as other 401k plans but has fewer restrictions.