In Progress
5) Retirement Planning
401(k) mechanics and employer match
A 401(k) is a retirement account offered by your employer. You tell your boss to take a percentage of your salary (e.g., 6%) and put it directly into this account before you even see it in your bank. The Employer Match is the most important 'trick' in American finance. Many companies say: 'If you put in 6%, we will also put in 6% for you.' This is a 100% return on your money instantly. It is literally free money. Vesting is the catch: While your money is always 100% yours, the company's match might take 3–5 years to become yours.
A 401(k) is a retirement account offered by your employer.
- You tell your boss to take a percentage of your salary (e.g., 6%) and put it directly into this account before you even see it in your bank.
- The Employer Match is the most important "trick" in American finance. Many companies say: "If you put in 6%, we will also put in 6% for you." This is a 100% return on your money instantly. It is literally free money.
- Vesting is the catch. While the money you put in is always 100% yours, the company’s match might take 3–5 years to become yours. If you leave the company before then, you might lose part of their contribution.
Free Resource: 401K Explained Simply for Beginners
**[How Do I Calculate My Employer 401K Match?](https://www.youtube.com/watch?v=1fz5APCtfn0)**
Resources
Record your progress
Mark this subsection complete to track your progress.