Hi Thao,

In the U.S., “401(k)” isn't a general blanket term for personal retirement funds. It refers to a specific section of the tax code that authorizes profit-sharing plans (a certain type of retirement plan offered by employers) to allow employees to have their contributions to the plan withheld from their paycheck on a pretax basis (meaning those contributions lower their taxable income for the year). The term is now used to refer to employer-sponsored retirement plans that exploit that section of the tax code. The reason you hear about 401(k)s so often is that they're the most common type of employer-sponsored retirement plan in the U.S., and many Americans use them as their primary if not sole vehicle for funding retirement. But there are also IRAs (individual retirement arrangements), which are another popular type of vehicle for funding retirement. Whereas a 401(k) has to be sponsored by an employer, an IRA is an account that you can set up at your own discretion.