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The Internal Revenue Code allowed for-profit business to establish 401(k) as a form of a salary-reduction plan starting in 1978. Since then, 401(k) plans have grown rapidly in popularity and now are the most common form of a defined contribution plan. Most employers match at least a portion of their workers' contributions as part of a savings and thrift plan.
Tax deferred contributions can be made to 401(k) plans as well as after tax contributions. Both tax deferred and after tax contributions are limited by law and change each year. |
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