Tyrone has an annual salary of $48,000.His employer offers a 401k plan;the company matches 25% of Tyrone's 401k contributions up to 5% of his salary.The maximum allowable contribution to any 401k is $16,500.To maximize his employer's contribution,Tyrone should deposit $200 a month into his account and his employer will deposit $50.

401k Plan

A retirement savings plan offered by many American employers, allowing employees to save and invest a piece of their paycheck before taxes.

Employer's Contribution

Money that an employer adds to an employee's benefits, such as a retirement plan or health insurance.

Allowable Contribution

The maximum amount that can legally be contributed to a particular savings account or investment vehicle, often pertaining to retirement accounts.