The money will be taxed when its withdrawn but this is still a great tax shelter for ordinary people. Earnings on your investments accumulate without being taxed until you withdraw them. This is another significant tax shelter. 401k's are offered by employers. Plans vary from company to company but in general there are considerable advantages in having the company administer the program.
Companies provide payroll deduction.
This makes contributing easy and automatic. Companies frequently match a portion of the contribution the employee makes. This is a huge benefit. Companies provide administration, record keeping and communication of the program. Most absorb these costs.