A 401 k is a type of retirement plan that allows employees to make pre- or post-tax contributions to an account. Employers can also contribute money toward an employee's 401(k) account. These contributions are not taxed until they are withdrawn from the plan, at which point they're treated as income and may be subject to federal and state tax.

If you're a business owner, you should know that it's not just your employees who can benefit from a 401(k). If you offer an employer-sponsored retirement plan like a 401(k), it can help attract and retain top talent. It also helps to keep your employees focused on the long-term success of your organization rather than day-to-day concerns like paying bills or finding time for leisure activities.