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How does a 401k work?
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A 401(k) is a retirement savings plan that allows you to save for your future. It works by allowing you to make pre-tax contributions, meaning that the money you contribute will not be taxed until you withdraw it in retirement. You can also make Roth 401(k) contributions, which are made with after-tax dollars and do not provide any tax benefits when withdrawn. The money grows tax-deferred, meaning that no taxes are due on the growth of the account until you take the money out in retirement.