A 401k is company sponsored, that means you are investing money through your company. In other words, if you have no job, or you have a job that doesn't offer 401k, then you can't invest anything. For most companies (that have 401k options) you can invest up to 100% of your check, but that means you wont get any spending money (for bills or anything) and if you want to withdrawl from your 401, you will get a penalty. So you can do 100%, but it isn't a good idea.

Additionally, companies will match (although not required) up to a certain % or flat rate. If you exceed that amount, you can still put in money, but the company wont match it.

Don't get mixed up with 401k and IRA.

2000

Only contribute to 401k the amount that your employer matches, it doesn't worth it to put more than your employer matching percentage, instead put it in a roth ira.

why to NOT contribute in a 401k if your employer doesn't match?

Because 401k is very limited in terms of investment choice. Also 401K funds are considered expensive.

Also if you needed your money, you get a penality if you withdraw them before age 59.5.

in Roth ira, you can get always your money "not the earnings" without penalties. Your earnings are grown tax free. Everything in investment market can be found there "stocks, bonds, etf's...etc"

Why to contribute to 401K? only to take the free money your employer gives you.

That is up to the company plan. There are various taxes like Social Security and others that need to be paid (the 401k just defers income tax) so you can't put it all in - probably about 80% or $1600.

Your entire net pay would be allowed. you can't contribute 100% of your gross because FICA and Medicare MUST be paid from that.

contributing to a 401(K) is limited so if your income is only $2K, you may only be eligible to contribute possibly $400

$2,000 per month? I'd do at least a quarter of it.

No more than you make.