Which financial account is commonly known for retirement savings?

The 401(k) account is specifically designed for retirement savings, allowing individuals to contribute a portion of their earnings to the account, often with the benefit of tax advantages. This means contributions can be made before taxes are deducted, potentially reducing the individual’s taxable income for the year. Additionally, many employers offer matching contributions to 401(k) accounts, providing an incentive for employees to save for retirement.

In contrast, a checking account is primarily used for daily transactions and does not typically offer significant interest or tax benefits for retirement savings. A money market account, while it may offer higher interest rates than traditional savings accounts, is also not specifically geared towards retirement planning. Similarly, a certificate of deposit (CD) is a savings vehicle that locks in funds for a specified term and is generally used for short-to-medium term savings goals rather than long-term retirement objectives. Thus, the 401(k) uniquely serves the purpose of retirement savings due to its structure and benefits.