What type of retirement plan is currently the most common employer-sponsored plan?

The most common employer-sponsored retirement plan is the 401(k) plan. This type of plan allows employees to save for retirement through payroll deductions on a pre-tax basis, lowering their taxable income for the year. Employers often incentivize participation in 401(k) plans by offering matching contributions, which can effectively boost an employee's retirement savings.

401(k) plans are designed to be portable, meaning that employees can roll over their savings when they change jobs, making them appealing in a dynamic job market. The investment options in a 401(k) can vary, allowing employees to choose investments that align with their risk tolerance and retirement goals.

Unlike other options such as IRAs or traditional pension plans, 401(k)s provide employees with more control over their savings and investment choices. Pension plans, while historically common, have declined in prevalence due to their defined benefit nature, placing financial responsibility on employers, which is not sustainable for many companies. Roth IRAs also offer tax benefits but are typically not offered as employer-sponsored plans.