Your First Job's 401(k): A Beginner's Checklist

The first time HR hands you a 401(k) enrollment packet, it's tempting to skim it, pick whatever's pre-filled, and move on to the next form in the stack. Honestly, that's a completely normal instinct on your first week at a new job — there's a lot to process. But this is one of the few forms where five actual minutes of attention can be worth thousands of dollars over your career, so it's worth slowing down for.

Start with the match. Always.

Before anything else: does your employer match contributions? If so, put in at least enough to get the full match. A common setup is 50% or 100% of what you contribute, up to 3–6% of your salary. Skipping this is basically turning down part of your compensation — I really can't overstate this one. It's the closest thing to a guaranteed return you'll find anywhere in your financial life.

Roth or Traditional — base it on your tax bracket, not a coin flip

If your plan offers both, you're really deciding between paying tax now (Roth) or later (Traditional). We've got a longer breakdown of this exact trade-off, but the short version: if you're early-career and likely in a lower bracket now than you'll be later, Roth tends to edge out. If you're already in a high bracket, Traditional's upfront deduction is often worth more today.

Actually choose your investments

Here's the part that catches more people off guard than you'd think: a lot of plans quietly default new contributions into a money-market or stable-value fund until you go in and pick something else yourself. So it's entirely possible to "enroll" and still not really be invested for growth — your money just sits there. If you don't want to think too hard about it, a target-date fund (the one labeled with a year close to when you'd retire) is a reasonable single-fund choice. It shifts its own mix of stocks and bonds as you get older, so you're not stuck rebalancing it yourself.

Look up the vesting schedule

Your own contributions are always 100% yours, no matter what. The employer match is a different story sometimes — it can vest gradually, meaning you only fully own it after a certain number of years at the company. Worth checking, especially if there's any chance you switch jobs in the next few years.

Set a beneficiary — takes thirty seconds, almost everyone skips it

Go back into the account portal after you enroll and actually fill this in. It feels unnecessary when you're 24 and just starting out. It's a small thing right up until it isn't.

Had a 401(k) at a previous job? It didn't disappear.

You can generally leave it where it is, roll it into your new employer's plan, or roll it into an IRA. Cashing it out is almost always the worst of the options on the table — you'll owe taxes on it, and likely an early withdrawal penalty too.

So how much should you actually contribute?

There's no single correct number here, and anyone who gives you one is oversimplifying. A lot of long-term plans aim for somewhere around 10–15% of income toward retirement in total, employer match included — built up gradually as your income grows, not maxed out day one.

Run your own numbers

Once you know roughly what you're contributing (and what your employer's kicking in too), our retirement calculator has a dedicated field for the employer match, so you can see your own contribution and theirs combined, projected out to retirement age.

This article is for educational purposes only and is not financial advice.