What is one common use of a 401(k) account?

A 401(k) account is primarily utilized as a retirement savings vehicle. Employees can contribute a portion of their income to the plan, often with the option for employers to match contributions to a certain extent. These contributions are made before taxes are taken out, which can lead to tax-deferred growth on the investments until withdrawal during retirement. The main goal of a 401(k) is to accumulate funds that can provide income during retirement, making it essential for long-term financial planning and establishing a secure financial future.

In contrast, investing in real estate or generating income from rental properties involves different investment strategies that are not typically associated with the purpose of a 401(k). Saving for higher education is generally addressed through other savings accounts, like 529 plans, which are specifically designed for educational expenses. Thus, while these other options are valuable in their own right, they do not align with the primary aim of a 401(k).