If you can't define a 401(k) plan, you're not alone: Though it's one of the most common retirement savings vehicles, 63 percent of Americans don't understand exactly how it works.
That's according to ValuePenguin, which asked 2,000 Americans if they could define key money terms like compound interest, credit score and 401(k), and then shared the results with CNBC Make It. When asked if they understood how a 401(k) plan works, only 37 percent of survey respondents answered yes.
That confusion can have repercussions for your future. After all, some experts say that not taking full advantage of your 401(k), if you have one, is one of the biggest mistakes people make when it comes to retirement planning.