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401(k)

A retirement plan made available by a company to its employees, featuring tax-deferred contributions and growth. The plan may also include matching contributions by the company.

Caveat: many 401(k)s invest in the company's own stock; if the company has a bad enough year you could lose both your job and your retirement savings. So you need to diversify your retirement account, even if you do take advantage of a 401(k).


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