Facts about the 401k plans

A 401k plan may be defined as an investment account, into which you can save a monthly contribution out of your salary. This contribution can be then matched, or we might say doubled, by your employer.

It is good to note that the money saved in a 401k plan is not liable to income tax. The money that you will be saving monthly will be spread in various investments of your choice, in order to give you a return, which is greater than that, which a normal savings account can give you.
There are however different plans on the market, and you have to make sure you get a good deal. You should be looking for features such as:

• daily valuation of the assets
• employer’s match
• minimal fees
• ease of getting a valuation
• a good number of investment options available
• the availability of loan withdrawals.

Also make sure that the provider does not put a maximum amount of contributions that can be made into the account, and make sure that you will be given all the necessary information such as prospectus, newsletters and other informative means that will help you understand better your plan’s performance.

In the unfortunate event that you loose your job, all is not lost. You will have the option of transferring your savings into another account, such as is the IRA. Your previous employer should be able to supply you with all the necessary forms. The best way of doing this is to open the IRA account, before you close your 401k plan, since you will be able to fill in all the account details, on the provided forms.

Reference: http://www.401khelpcenter.com/faq/faq_main.html