Another possibility is that the employer could match your contribution within a given range (i.e. a variable employee match). Taxes are collected on the funds when you withdraw the money during retirement. As an employee you can choose various investment portfolios, usually an assortment of mutual funds that focus on stocks, bonds, or money market investments. Take the time to really understand the various options and how to make the most of the company's matching contributions. Unless you have a college degree in finance or investment banking, retirement plans can sound like a foreign language. The regulating factors are very similar.
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