What Is a 401(k) and How Much Should You Save for It?

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Are you planning to work for your entire life? If you’re like most people, you probably envision yourself enjoying a relaxing retirement once you reach a certain age — and you’re probably also thinking about how you’re going to afford the life you want when you’re no longer earning a paycheck. Perhaps you’ve even started saving already but are thinking you want to get more serious about it. And that’s a good thing; the sooner you start saving intentionally and with a plan in place, the more comfortable your life has the potential to be during your retirement.

One of the most common tools for saving funds to use during retirement is a 401(k). No matter how long you’ve been in the workforce, it’s likely you’ve heard this term. But what exactly is it, and how can it help you? Whatever your age and current plans for funding your retirement lifestyle, it’s essential to learn more about 401(k)s and the ways to determine whether you're on track for accomplishing related financial goals.