Beginner’s Guide to 401(k) Investing

A 401(k) plan is one of the easiest ways to start investing for retirement. Many employers offer matching contributions, tax advantages and automatic payroll deductions that make saving simple.

Step 1: Enroll and Contribute

If your employer offers a 401(k), sign up and contribute at least enough to get the full company match—this is free money. Aim for at least 10% of your salary, but even 3–5% gets you started.

Step 2: Choose Your Investments

Most plans offer target-date funds, which automatically adjust your stock/bond mix as you approach retirement. Alternatively you can build a three-fund portfolio with U.S. stocks, international stocks and bonds.

Step 3: Check the Fees

Look for expense ratios under 0.15% if possible. Lower fees mean more of your money stays invested for growth.

Next Steps

Review your contributions annually, increase your savings rate when you get raises, and rebalance your portfolio if needed.

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