Teresa just received a quarterly statement from the Vanguard Group, which shows earnings from investments using her pretax dollars. Teresa contributes a percentage of her salary to the plan and her company matches it. Teresa has a 401(k) plan

Indicate whether the statement is true or false

TRUE
Explanation: A 401(k) plan is a defined contribution plan in which pretax dollars are invested. It is often managed by an outside investment company, such as the Vanguard Group. An employee's annual contribution is determined by the employee as a percentage of salary up to a specified legal limit.