All the 401k plans you see today that employers use are a sponsored retirement savings plans which allow the companies employees to make a contribution by transferring part of their salary in to the account. There are many reasons why a lot of people are now using these plans to save for their retirement. The most important of all is the 401k tax deduction benefits that are available to them whilst they placing monies into the plan.
These plans are extremely attractive to many employees today as it allows to save towards their retirement whilst the tax that they should be paying on all their earnings from the investment of their monies is deferred. However these tax deferments or deductions are only available until the time that the money is withdrawn. But for many people they find that once they reach retirement age and begin to withdraw the funds from their 401k plan they are in much lower tax bracket than they were whilst in employment.