401(k)s got their start back in 1978, when the IRS established a new provision to allow employees to
defer some of their compensation into an account with their employer. The beauty is that in many cases,
your employers will match your contributions to a certain point. Employer matches come in a wide variety
of options depending on the employer’s discretion. Some employers match contributions dollar for
dollar. Others match 25 or more cents on the dollar. That means each time you contribute, your employer
adds money, for free! Often times your employer will only match up to a certain percent of your salary. But
regardless, they’re adding to your retirement for you!
When you first enroll in a 401(k) plan, you’ll be given a list of investment options.
It’s best to sit down with a financial professional and figure out how you wish to
invest your money. Your options for investments will vary from conservative
fixed income investments to aggressive stock portfolios. You are able to
allocate your money into investments in different combinations depending on
how much growth you want to achieve, and how much risk you can tolerate.
articlesource:themoneyalert.com
