17
QuizMultiple Choice

Week 6: Employee Expectations

Question 17 • 26-27 SAS Ignite Career Planning and Development - EL4222

One of the big advantages to a 401(k) plan is that ______.

Answer
A
401(k) plans are rare enough that they are very valuable
B
the plan automatically increases in value by 500%
C
you don’t have to pay into a 401(k) with your own money
D
the amount you contribute reduces your taxable income

Explanation

Traditional 401(k) contributions are generally taken from your pay before income taxes are calculated. That means contributing can reduce your taxable income for the year, though you’ll typically pay taxes when you withdraw the money later. So the correct choice is “the amount you contribute reduces your taxable income.”

AI-written and checked against the verified answer.

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