The 401(k) plan originated from some quirks in 1970s tax law and wasn't intended to be the universal solution to funding retirement. In more than three decades of growth, however, that's what it has become.
Today over 90 million Americans own more than $6.5 trillion in defined contribution plans, according to a 2015 report from Vanguard. Yet many savers still don't understand the 401(k) process. The same goes for similar plans, such as the 403(b) for nonprofit employees, 457 for public education workers, and federal government employees' Thrift Savings Plan.