About 98% of companies offering employees a 401(k) plan match employee contributions

What is a 401(k)?

Should you get a 401(k)? To make sense of this obscure piece of tax code, here’s a beginner’s guide to one of the more common forms of retirement savings in the US. Learn the history of the 401(k), how to sign up for one, the different types, and more in this well-organized and concise explainer from Investopedia.

Roughly 70 million Americans have 401(k) plans

Ted Benna, a rural benefits consultant, proposed a reinterpretation of a small tweak to the Internal Revenue Code in 1980. This led to a fundamental transformation of how American workers plan for retirement.

Technically speaking, a 401(k) is a type of pension

The Employee Retirement Income Security Act of 1974 lumped both defined-contribution plans like 401(k) plans, and defined benefit plans (like what is colloquially known as a pension) under the term “pension” in order to protect workers and make retirement plan enforcement simpler. Learn more about the ERISA here.

401(k) plans and pensions differ in who has control over the investments

With pension plans, a company contributes to an investment fund from which it distributes regular payments to a retired worker until their death. A 401(k) gives the worker control over contributions in a tax-advantaged account.

The average American contributed nearly $6,000 to a 401(k) account in 2023

That's an increase over the previous year—and roughly 8% of their total income. When employer contributions are factored in, the total average contribution to 401(k) accounts rose to $8,618 in 2023, up from $8,362 in 2022 and $8,236 in 2021.

Explore the key differences between 401(k) plans and IRAs

A 401(k) is employer-sponsored, may include matching contributions, and allows higher annual contributions (up to $23,000). An IRA is self-managed, offers greater control over investments, and has lower contribution limits ($7,000). Both plans come in traditional and Roth options, but income caps may limit IRA choices, while 401(k)s have no such restrictions.

A 401(k) plan allows workers to save for retirement without paying taxes until later

With a 401(k) plans you can invest more money now and let it grow with compound interest. Americans have more than $7T invested in these types of accounts.

Fees can eat away at your 401(k)

Every investment plan has an expense ratio—a percentage of the total assets that goes to the investment manager in the form of fees. Because 401(k) plans are so common, and many of their participants are not savvy investors, the relative expense ratio for them has often excessively increased.

A 401(k) 'super catch-up' lets people between 60 and 63 add money to their 401(k)

Through a "super catch-up," they can boost their retirement contributions as they prepare to stop working. But super catch-ups aren't always right for everyone.

The financial crisis in 2008 had a major impact on many 401(k) plans

Amid the 2008 financial crisis, stocks and bonds cratered as the broader market floundered due to the subprime mortgage crisis. Investors with so-called "target-date" funds—which shift allocations based on the maturation of a fund—shared in the slump, with some funds declining by 20% or more just a year or two away from maturation.

In 2019, Congress passed the Secure Act to reform key aspects of the US tax code

Key Secure Act provisions included raising the age at which mandatory distributions take effect (to increase saving), allowing larger catch-up contributions for older individuals, and allowing employers to directly match contributions in a Roth 401(k).

Social Security trust funds are expected to be unable to pay full benefits by 2035

Most US workers have 6.2% of their gross paycheck taken out for Social Security. The government requires employers to match that 6.2% as well, for a total of 12.4%. This video dives into the specifics of how Social Security functions from a financial perspective.

Dive deep into the numbers that shape each YC deal

Y Combinator invests $500K into each company in any given batch. $125K of that investment converts into a fixed 7% in ownership of the startup, and the other $375K is invested on something called an uncapped MFN safe. YC explains what that means and more terms of the deal in a detailed article on their website

How mutual funds work

Investing in mutual funds can give you access to a wide range of securities, such as stocks and bonds, with just a single investment. Mutual funds are one of today's most common investment options. There are different types of mutual funds, such as stock, bond, money market, and target-date funds.

'Payment in kind' is a compensation method that uses alternatives to cash

Companies can make payments using goods, services, or additional securities instead of cash, helping companies preserve their cash flow. Public BDCs receive roughly 8% of their investment income via PIK.

Contributing to a friend’s child’s 529 Account

A podcast listener asks about contributing to a 529 savings plan for their friend’s child. The hosts go over the basics of what a 529 is and how it works, and then give advice on how the listener can contribute, touching on how to have conversations about money with friends.

Employers get to keep any FSA funds not used by the annual deadline

Flexible spending arrangements have use it or lose it deadlines defined in the plan. Employers that offer FSAs get to keep any unused funds, but that money has to go towards administering the FSA program. Remaining FSA funds can also be pooled and divided evenly amongst a company's FSA participants, but very few companies actually do this.

Compounding, explained

During conversations about personal finance, the term "compounding" gets thrown around—but not everyone understands how compound interest and compound returns work. Broadly speaking, compounding is what happens when you not only earn returns or interest on your original investment, but also on the accumulated returns or interest you receive over time. This article explains how both of these processes function, and what compounding could mean for your wallet.

How to financially prepare if you think AI is coming for your job

One expert suggests contributing more money to an emergency savings fund and putting that fund in a high-yield savings account, maxing out employee benefits while still employed, and more.

Nearly half of billionaires plan to increase exposure to direct private equity investments in 2026

In a global survey administered by the Union Bank of Switzerland (UBS), 49% of billionaires plan to continue investing in companies by providing direct access to capital. However, only 37% of billionaires plan to increase their investments in private equity funds.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Investors rely on the S&P 500 as a benchmark for the state of the economy

Since the index represents a broad range of diverse industries, it's become a proxy for the market itself and a common benchmark for investors to compare returns and performance patterns against. Generally speaking, when someone says a stock is under- or out-performing the market, that actually means under- or out-performing the S&P 500. The S&P 500 is exchange-agnostic, and includes companies listed on both the NYSE and Nasdaq.

About 88% of all homebuyers feel their home is a good investment

According to data from 2022, 50% of homeowners felt their home was a better investment than stocks. The financial benefits of homeownership are significant: From avoiding rising rents to tax advantages, this interactive article outlines several.

College endowments FAQ

​The National Association of College and University Business Officers (NACUBO) is a membership organization representing chief administrative and financial officers at colleges and universities. This page addresses 10 common questions about college endowments, including their purposes, management, and spending policies. Learn more about how endowments support institutional missions and financial sustainability.

Banks make money by loaning customer deposits and earning interest

This means the interest you earn on your deposits is lower than what the bank earns on the same amount. Banks often keep cash reserves (though a minimum requirement was rescinded in 2020) but generally invest in government bonds, corporate securities, and loans to other banks. During bank runs, depositors withdraw more than the bank has on hand.

Roughly 40% of basic US research is federally funded

Basic research aims to produce new knowledge for it's own sake, as opposed to applied research, which seeks direct application. Private businesses make up the bulk of the rest of the funding.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

Venture capital is a form of funding provided to early-stage companies with high growth potential, typically in exchange for an equity (or ownership) stake

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

The Nasdaq's 'Magnificent 7' companies are responsible for roughly 40% of the Nasdaq 100 index's gains, while the remaining 93 companies account for the other 60%.

In 2025, four executives from large tech companies were given positions in the US Army Reserves—including Palantir Chief Technology Officer Shyam Sankar, which reinforced Palantir's ties with the US military and its role as a leading defense partner.

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

44% of Americans say they pray at least once a day—discover how your state's religiosity stacks up against the rest of the country.

Despite being favored by 87% of Americans, Congress does not have term limits.

When you complete a CAPTCHA on a website to prove you are human, you may be unknowingly training algorithms for self-driving cars, whose systems require training data to help identify crosswalks, bicycles, and other outdoor objects.

About 2,000 US babies are born annually without some portion of their limbs, potentially leading to a lifetime of pricey prosthetics.

Children are now three times more likely to say they want to be a YouTuber when they grow up than an astronaut, with some even attending 'YouTube camps' that teach kids how to create content for the platform.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

Bone marrow (soft tissue found inside certain bones) generates roughly 500 billion new blood cells each day

A Yale student wrote a profound essay about the consulting industry's influence on elite college students that was published in a book of her writing after she died in a post-graduation car accident.

Fireworks-related ER visits are on the rise—in 2024, they increased by 52% as compared to the prior year.

Objects can be 3D printed with light by projecting 2D computerized tomography (CT) scans onto rotating cylinders of resin, which solidify upon exposure.

Brandi Chastain, the star of the 1999 US victory over China in the 1999 Women's World Cup, was a last-second choice to take the penalty kick that sealed the victory.

See how each of the more than two million known species relates to each other—and to common ancestors—in this zoomable tree of life.

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

In its famous catalog, Sears sold $600 DIY house kits from 1908 through the 1940s, resulting in an estimated 100,000 'Sears and Roebuck homes.'

The use of fungi to detoxify land and water—a process known as mycoremediation—has been used to clean up natural resources affected by the 2025 California wildfires.

A small portion of The Winstons' 'Amen, Brother,' an obscure '60s gospel record, is the basis for thousands of hip-hop tracks, making it one of the most sampled records ever that's informally known as 'the Amen break.'