In a typical 401(k) plan, an employee can choose to contribute a percentage of their salary into the plan, which is then invested in selected mutual funds, stocks, or bonds. The employer may also match a portion of the employee's contribution, enhancing the growth of the employee's retirement savings.
John decided to maximize his retirement savings by contributing the maximum allowable amount to his company's 401(k) plan, taking full advantage of his employer's matching contributions.
