Why this is correct (Q1 — “An employer-offered retirement account…”): A 401(k) is fundamentally a workplace retirement savings vehicle sponsored by an employer that lets employees direct part of their pay into an investment account with special tax rules. The defining features are employer sponsorship (the plan is offered through the workplace), employee-directed contributions (you choose to defer part of your salary), and tax-advantaged treatment (either pre-tax or after-tax/Roth options, depending on plan features). Because employers administer plan recordkeeping, payroll withholding, and often offer a selection of investment options, the 401(k) differs from a simple bank account or a government pension. It is not direct cash in your pocket — it’s earmarked for retirement and subject to plan and tax rules. This context explains why the simple phrase “employer-offered retirement account with tax advantages” captures the essence: the account exists because the employer sponsors it, and its main purpose is retirement savings, not everyday spending. Learning to spot those three features—employer sponsor, employee-directed, tax preference—helps avoid common confusions (for example, thinking a 401(k) is a government benefit or a regular checking account).

Practical takeaway & how to use this knowledge: Knowing a 401(k) is an employer-sponsored, tax-advantaged account helps you prioritize it correctly in your financial plan. For example: (1) check whether your employer offers matching contributions, (2) enroll and set payroll deferrals, and (3) pick appropriate investments from the plan menu. Because plan details vary (investment line-up, fees, match formula, vesting), always read the plan’s summary plan description and investment disclosures. If you change jobs, remember a 401(k) is portable via rollover options. Understanding the account type also helps you compare it with IRAs and taxable brokerage accounts so you can decide where to hold different types of investments.