A 401(k) is an employer-sponsored retirement savings plan in the United States. Contributions are typically deducted from your salary before income tax, lowering your taxable income today, and investments grow tax-deferred until withdrawal in retirement.
Many employers match a portion of contributions — for example, 50% of what you contribute up to 6% of salary. That match is effectively an immediate return on your money, which is why the standard advice is to contribute at least enough to capture the full match.
Project your balance with the Retirement Savings Calculator.