A 401(k) plan is a retirement savings account offered by employers that allows employees to save a portion of their paycheck before taxes are taken out. This means that the money contributed to the plan can grow tax-deferred until it is withdrawn during retirement. Many employers also offer matching contributions, which can help employees save even more. Participants can choose how to invest their contributions, typically in a range of options like mutual funds or stocks. Withdrawals made before age 59½ may incur penalties, encouraging individuals to save for the long term.