401(k) Plan: Start off knowing what exactly this plan actually is. A 401(k) plan is a tax-deferred retirement plan that is offered through your place of employment. The plan can be a cash election, profit-sharing, or stock bonus plan, or a salary reduction per paycheck plan. This plan will help you save for future retirement. Planning wisely will make for the best returns come retirement time.

Accrued Benefits: This describes the benefits an employee with a 401(k) plan has already amassed to date based upon their salary and work time put in thus far.

Annuity: This is a contractual agreement where the insurance company is held to make regular payments to someone for the rest of their lifetime or an agreed upon time frame.

Auto Enrollment: Sorry, you're not getting a new car. This is actually the practice of enrolling all eligible employees in a retirement plan without their request to participate. If the employee wants to opt-out, they must file a request with HR.

Brokerage Window: In some cases, this is the glass pane where you can peek into the broker's office, but for our purposes, a brokerage window is when a 401(k) plan allows for employees to invest in stocks and funds offered by a brokerage firm and part of the employer's plan.

Elective Deferral: The amount an employee contributed to a 401(k) plan, either pre-tax or as Roth contributions if the employer's plan offers a Roth option. *See "Roth" below.

Employer Matching Contribution: Some employers will put money towards their employees' savings plans. Matching contributions are usually a set percentage of what the employee puts in, up to a fixed limit.

Employer Discretionary Contributions: Employers may have a plan at the end of the year for increased matching contributions or profit sharing. These are tax-deductible expenses.

ERISA: This stands for The Employee Retirement Income Security Act, established in 1974. This act sets standards for 401(k) plan administrators and holds up the same rights and regulations for all plan participants across the board.

Fixed Match: No, not a tennis game with a pre-determined winner, but a matching employer contribution that must be contributed each year to an employee's plan as part of the agreement unless otherwise amended.

Individual Retirement Account (IRA): This is a retirement plan that is person and tax-sheltered. Employees who work for a company that doesn't offer a 401(k) may opt for an IRA instead.

Longevity Risk: We all hope to have enough money saved to cover our expenses for the rest of our lives, but a longevity risk is the chance of outliving one's savings. Hopefully, we are all covered for life by contributing as much as possible during our working years.

Participant: This is the person who is eligible to make contributions to a 401(k) plan or to share in an employer's contributions to a 401(k).

Plan Provider: This is the company or firm that develops and sells the 401(k) plan to your employer. This may be a mutual fund company, an insurance company, a brokerage firm, or another related financial services institution.

Plan Sponsor: In a nutshell, your employer. The plan sponsor is the party that offers the 401(k) plan to their employees. They are responsible for choosing the plan and the provider and which investment options will be delivered by the plan.

Pre-tax: Contributions are put into a 401(k) before taxes are calculated. The employee's gross pay is then reduced by how much is put into the plan.

Retirement Plan: This is a plan person makes to set aside income for use during retirement. A 401(k) is an example of such a plan.

Roth 401(k): This is a special feature of a 401(k) plan that lets employees make contributions on an after-tax basis. The money will grow tax-free and can be withdrawn tax-free once the employee reaches the age of 59½ and has had the account for 5 or more years.

Tax-Deferred: Until money is withdrawn from a 401(k), no federal income tax is paid on contributions or earnings.

Vesting: This is the period of time an employee must work for an employer before they are eligible for a 401(k). Some employers start immediately while others require a year or more of employment.

It's time to prep for retirement. With this 101 on 401(k), you're on the path to saving for the "golden years!"