No matter what you do for a living or how much money you make, you need to prepare for your own financial future. With the traditional defined benefit pension plan quickly disappearing, workers are increasingly being asked to shoulder more of the burden of saving for retirement. Making your money multiply is not always easy, but the sooner you get started the better off you will be.
Contact the human resources department at your employer to see if they have a 401(k) plan available. The beauty of a 401(k) plan is that it allows you to save money on taxes while putting money aside in a tax-deferred account.
Check the amount of the company match and contribute at least enough to get the full matching funds. A typical arrangement has the company kicking in 50 cents on the dollar for the first 6 percent of employee contributions. That means that if you contribute 6 percent of your $30,000 salary, or $1,800, to the 401(k), the company kicks in another $900. It is hard to find a similar return anywhere in the investing world.
Complete the 401(k) enrollment application and submit it to your employer. Include complete information, including your full name, address and Social Security number.
Sign up for the automatic escalation program if your 401(k) plan offers one. With this feature, your contributions are automatically raised each year, helping you save even more and build a bigger nest egg. For instance, if you contribute 8 percent of your income this year and sign up for automatic escalation, your contribution will automatically go up to 9 percent in a year.
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