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401(k) plan

Retirement plans, open to employees at most large companies and many small ones. Within limits, employees can contribute to the 401(k) plan by having a designated amount of pretax dollars deducted from their paychecks. The employer often matches part of the employee's contribution. The employee pays no taxes until starting to withdraw the money, which he or she must do between the ages of fifty-nine and a half and seventy and a half. (See also Keogh plans.)

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The New Dictionary of Cultural Literacy, Third Edition Copyright © 2005 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.