Which of the following best describes a 401(k) plan?

A 401(k) plan is best described as a tax-advantaged retirement savings account because it allows employees to save for retirement directly from their paychecks before taxes are deducted. This means that contributors can lower their taxable income in the year they make contributions, which can lead to significant tax savings. Funds in a 401(k) grow tax-deferred, meaning that individuals do not pay taxes on the earnings until they withdraw the money, typically in retirement when they may be in a lower tax bracket. This type of plan also often includes employer contributions, making it a valuable tool for long-term financial planning and retirement readiness.

The other options do not accurately represent a 401(k). For example, while health insurance is an important benefit, it is not related to retirement savings or the tax advantages provided by a 401(k). Similarly, a student loan repayment plan refers to a completely different financial obligation and does not pertain to retirement accounts. Lastly, an investment in real estate involves purchasing property for income or appreciation, which is distinct from the function and purpose of a 401(k) plan dedicated to retirement savings.