A 401(k) account available through your employer is one of the best methods for building retirement savings. There are two key advantages. First, pre-tax contributions made to your 401(k) now are tax deferred, so each year's total taxable income will be lower. Second, some employers provide 401(k) match programs where they contribute to your 401(k) account. Depending on the program, employer contributions can range from 0 percent to 100 percent of your contributions.
Use this calculator to determine how much you should put in your 401(k).