What a 401(k) actually is
23 Jul 2025 · 0 min
0:23
Short explainer by Craig Wear, CFP® stating that a 401(k) is a tax classification (section 401(k) of the IRS code) rather than an investment product; it governs how retirement account earnings are taxed. Contrasts Roth 401(k) (pay taxes now, grows tax-free) with Traditional 401(k) (taxes deferred until withdrawal) and asserts that choosing correctly can save thousands.
Questions this video answers
Section 401(k) of the IRS code.
You pay taxes now and it grows tax-free.
You defer taxes until later (taxed on withdrawal).
