• What is a 401k
• What's the benefit of a 401k over other retirement investments?
• Are you eligible for a 401k?
• Can you open an IRA or a Roth IRA if you already have a 401k?

One of the best retirement investments out there, a 401k is a type of personal pension plan offered by your employer. You decide how much of your paycheck you want automatically deducted for the plan — all before federal taxes are taken out. Even better, your employer may offer a "company match" — essentially giving you free money. Most employers (over 80%) offer some type of company match — so don't pass it up. Then you choose how to invest your contributions, depending on the choices in your 401k plan. When you retire, you end up with all the money you originally put in, plus the earnings on your investments, minus income taxes.

• Tax-deferred contributions and earnings make up the best one-two punch in investing. Before being taxed, your money is put into your 401k and allowed to grow along with your earnings. At retirement, you finally pay taxes on your withdrawals.

• Reduced taxes. Who wouldn't want less taxes? If you contribute to a 401k, your federal, state, and local taxes are taken out of your salary only after your 401k money's been taken out first, so your tax bill is lower. That's why maxing out on your 401k contributions is an unbeatable tax saver.

• Company match provision. Hands down, the company match is the easiest way to make an instant return on your money. Most employers (over 80%) offer to match a percentage or set dollar amount of the money that you put into your 401k. In a plan where your employer is matching your contribution at 50 cents on the dollar, you've made a fast 50% return.

• Instant savings. This is arguably the easiest way to force yourself to save for retirement. Before you even get the chance to blow your paycheck, your 401k contributions are already automatically taken out.

• Built-in dollar-cost averaging. Because your contributions are usually a percentage of your salary, which is more or less the same every pay period, you invest the same amount with every paycheck. This is dollar-cost averaging, a much-touted tenet of smart investing.

Check with your employer's benefits department. If you change jobs and have already contributed the maximum pre-tax $10,500 to your old company's 401k, then you aren't eligible to contribute to your new company's 401k until the next year.

But having a 401k changes the amount of money that you're allowed to deduct with a traditional IRA. You could also opt for a Roth IRA along with a 401k, though contributions are not tax-deductible. One sweet benefit of the 401k over an IRA or Roth: you can contribute up to $10,500 of pre-taxed money to a 401k, but only $2,000 for either a traditional IRA or Roth IRA.