Starting a new job is the perfect time to start or boost your retirement savings. If you are just getting started in your career, don’t make the mistake of thinking you’ll have plenty of time later to fund your retirement. If it’s not your first job, you may have established some savings habits, but there is always room for improvement.
You may be able to save for retirement at your new workplace through a 401(k) plan. These plans have many benefits including direct deposit from your paycheck, which automates the savings process. Your employer may also offer matching funds. Even if your employer doesn’t offer a retirement plan, you can still save for retirement by putting money in an Individual Retirement Account (IRA). Learn more about saving outside of work through an IRA.
If your company offers a 401(k) plan, BetterMoneyHabits.com suggests 10 key questions to ask your HR representative (or find the answers to in your plan documents) including:
1. When can I start contributing?
Not every 401(k) plan allows new employees to begin contributing right away. Some companies might make you wait two, three, or even 12 months after you’re hired. Your plan administrator can tell you whether a waiting period applies.
2. Will I be enrolled automatically?
An increasing number of companies—more than two-thirds as of 2014, according to HR consulting firm Towers Watson—automatically enroll you in a 401(k) when you join the company. Automatic enrollment is designed to encourage you to save by making it easy to join. Ask your HR representative whether this is the case at your company, because if you’re not automatically enrolled, you will need to work with them to get enrolled.
3. Is there a company match, and if so, what are the rules?
Many employers offer incentives for employees to contribute to their 401(k) plans by matching contributions up to a certain point. For instance, some companies may match every dollar you contribute with 50 cents of their own, up to a certain percentage of your salary. But individual plans vary widely, and there may be restrictions on qualifying for the company match. Ask your plan administrator for the rules that apply to your company’s plan.
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