You can read a more detailed explanation here (along with comparison data of median balances by age and how much financial pros recommend you have by age).
To keep things brief here, 401(k) and 403(b) plans are tax-advantaged retirement plans sponsored by employers for their employees. These employers may or may not contribute to employees’ accounts through so-called employer matching of employee contributions.
An estimated 80 million Americans participate in such plans, which hold about a fifth of the US retirement market’s assets.
Now that we (sort of) know what 401(k) plans are, and how many invest through them, it’s time to dive into their savings, risks, and benefits.