What is a common feature provided by a 401(k) plan to its participants?

A common feature of a 401(k) plan is the salary-deferral option, which allows participants to contribute a portion of their salary directly into their retirement account before taxes are taken out. This feature not only facilitates saving for retirement but also provides immediate tax benefits since contributions reduce taxable income in the year they are made. Additionally, many employers offer matching contributions as an incentive for employees to participate, further enhancing the value of the salary-deferral option.

In contrast, health insurance, retirement age benefits, and life insurance are typically separate from 401(k) plans. While they may be part of an employee’s overall benefits package, they do not pertain to the specific retirement savings mechanisms offered by a 401(k). The focus of a 401(k) is primarily on retirement savings and investment, making the salary-deferral option a key feature that supports participants in reaching their long-term financial goals.