◈ GLOSSARY · RETIREMENT
401(k).
A definition, in plain English — with the books that teach it.
ClearValue Books · reviewed against sources ·
◈ DEFINITION
What it means
Definition
An employer-sponsored retirement account where you defer part of your salary into investments, usually pre-tax (traditional) or post-tax (Roth). The 2026 employee contribution limit is $23,500, plus a $7,500 catch-up at age 50+. Most plans include an employer match — the first dollars you save should always be enough to capture the full match, because that's a 50% or 100% return before any market move.
◈ IN PRACTICE
Example
Salary of $100,000 with a 5% contribution and a 100% match up to 4%: you put in $5,000, the employer adds $4,000, total $9,000 into the account this year.
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