401(k) Plan: A 401(k) plan is a tax-deferred retirement account offered by your employer. Tax-deferred means that the money you contribute to the account is tax deductible in the year it goes into the account, so it is not taxed until you withdraw it from the account (generally, after you reach age 59 ½). In order for you to participate in a 401(k) plan, your employer has to offer such a plan, and you have to meet the eligibility requirements, which are determined by your employer. Roth 401 (k): Like a traditional 401(k), a Roth 401(k) is a type of retirement plan offered by your employer. With a Roth 401(k), however, your contributions are not tax deductible. Instead, you contribute to the account with after-tax dollars and, when you retire, your withdrawals, including the interest earned on your contributions, are made tax-free. Employer Matching Program: Some employers contribute an additional amount to their employees’ 401(k) accounts, contingent on the employee’s participation in the plan. For example, an employer might match 50% of an employee’s contribution, up to 5% of the employee’s income. This means that for each dollar that the employee contributes to his or her retirement account, the employer contributes 50 cents to the account. Once the employee has contributed 5% of his or her income, the employer’s matching contributions cease for that year.