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A defined contribution plan, often known as a cash or deferred arrangement, is a 401(k) plan. Employees have the option to elect not to receive a portion of their pay, which is instead put into the 401(k) plan on their behalf and before taxes. The employer may occasionally match these donations.
While both programs offer retirement income, they are each administered differently. An example of an employer retirement account is a 401K. An individual retirement account, or IRA, is one. A standard 401(k) is a type of retirement savings plan that enables employees to put money aside for retirement, invest that money, and postpone paying income taxes on that money and its gains until after they retire.
A qualifying profit-sharing plan's 401(k) element enables employees to set aside a percentage of their salaries for personal accounts. Elective salary deferrals are not considered taxable income for the employee (except for designated Roth deferrals). Employers may make deposits into their employees' accounts.
To learn more about 401(k) plan, refer: brainly.com/question/27159207
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Correct Question:
In the united states, the 401(k) plan or individual retirement account is a defined plan for what.
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