Definition of 401k

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Debt Consolidation Glossary and Related Terms:


Related Finance Related Services: The following directory listings on the Debt Consolidation Loan Directory are provided to assist you with the management or consolidation of your debt. Also, while on this site, feel free to shop for other financial services such as car insurance and home equity loans for debt consolidation.

  • Personal Loan - Need a smaller loan? Personal loan financing is most often unsecured. Meaning... your home or personal property is not used as collateral and the loan decision will typically be based upon your credit history and your ability to make the necessary payments. Also, this is often referred to as a signature loan.
  • Debt Settlement Service - Too many debts? List of companies providing this alternative to bankruptcy that provides for debt negotiation and arbitration services for those that need to eliminate debt.

401(k) / 401k definition

Define 401(k) / 401k: An employer-sponsored, defined contribution, retirement plan. It is named after the section of the IRS code which defines the plan. The savings plan allows workers to save for retirement by making tax-deferred contributions. Usually, the contributions are withheld from the employee's paycheck, and usually they are matched in part or in whole by the employer. Employer matching funds are usually subject to some period of vesting.


Most 401(k) plan savings are invested in mutual funds emphasizing stocks, bonds and money market investments. Most plans allow the employee to select a portfolio of mutual funds from a large set of offered funds. In general, taxes are paid on 401k plans as funds are withdrawn at or after retirement. Funds may be withdrawn prior to retirement, but when this done the disbursement usually is subject to penalties and full taxation.



Debt Consolidation Glossary
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