[jrbancel]

1) Taxes

For example, an average software engineer making $150,000, contributing 10% to her 401k will reduce her taxable income to $135,000. At a 28% marginal tax rate, she will save $4,200 on taxes.

2) Free money

If the employer matches 50% of the contributions, the employee will end up with an additional $7,500 on her 401k account.

3) Very few constraints

It depends on the employer but she could be free to invest the 401k money as she wants. She doesn't have to put it in a specific set of funds.

In a nutshell, she would get $11,700 more than if she hadn't used her 401k and is free to invest as she pleases.