Retirement savings account provided by employers. Contributions may come from the individual and/or the employer. In a traditional 401(k), contributions and any gains on investments are not taxed until funds are withdrawn. Some plans also allow Roth contributions. 401(k) funds are accessible when the owner is 59 1/2 or meets other criteria as decided by the IRS. If funds are withdrawn prior, they are assessed a 10% penalty tax in addition to the other tax owed.