Question

he graphic shows a sample 401k investment.

A sample 401 (k) investment has an annual contribution of 5,000 dollars, employer match of 5 percent, employer contribution of 2500 dollars, and total contribution of 7500 dollars.

Based on the graphic, what advantage does this 401k have over other types of investments?

It encourages employees to contribute by offering an employer bonus.
It ensures that employees who contribute will retire with more money.
It guarantees employees a return on their investment because of a company match.
It incentivizes employees to contribute by offering an employer match.

Answer 1

It incentivizes employees to contribute by offering an employer match.

Reason: the graphic shows the employer adds money (the match) on top of the employee's contribution, which encourages participation by increasing total contributions.