human
Can you explain how a 401(k) works?
assistant
A 401(k) is an employer-sponsored retirement savings plan that allows employees to save for retirement. Contributions are typically made pre-tax, meaning the money is taken out of their pay before they see it and put into the account. The contributions are usually matched by the employer, which can increase the amount of money available in the account. When an employee reaches a certain age or meets other conditions, they may be able to take withdrawals from the account, tax-free.