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401(k)s (named after the section of the tax code that deals with them) are retirement savings plans sponsored by employers.  They allow you to contribute a portion of your income to an investment account. (Most contributions are made before taxes. Some plans allow you to contribute after tax income as well).  You have a certain amount of discretion in choosing which investments to hold within your account.  Many employers match their employees' contributions and some companies are now offering a Roth 401(k). In 2008 the employee contribution limit will be $15,500 (or $20,500 if you're over 50).

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