Did your employer offer you early retirement?  Are you changing jobs?  If so, you may wonder about your 401k.  In the event of a job switch, you can rollover your 401k to your employer's new plan, pay fees to keep it the same, rollover the account into an IRA, or accept cash out.  In terms of early retirement, if you don't have the needed financial resources to makeup for the extra years of retirement, 401k cash out is one of your few options, aside from getting another job.

A new job and early retirement are just a couple instances in which an individual may ask for an early 401k withdrawal.  At the time, it seems like a good idea.  After all, who is going to turn money away?  Not many.  With that said, it is important to look at the big picture.  When taking an early withdrawal from your 401k, it is not as simple as taking money from your bank account.  You are hit with many rough patches and consequences.  What are they?

Taxes and fees.  401k plans are designed for retirement.  For that reason, you should wait until you are at least 59 ½ years old to collect your savings.  Even in the event of early retirement, you are required to pay a fee.  That is a 10% fee.  Next, there is the tax factor.  Your employee contributions throughout the years were tax sheltered.  You did not pay tax on that income.  Yes, you have known all along that you will pay taxes on this money, but are you ready to pay them now?  You must be if you intend to take an early withdrawal.  Depending on the size of your 401k, this can be a lot of money.  Add that in with your 10% early withdrawal fee and you may not have much left.

As previously stated, it depends on the situation.  If just switching jobs and in your early 20s or 30s, consider the alternatives.  These include paying management fees to keep your 401k plan with your former employer, rolling over to your new employer's program, and rolling over to an IRA.  For most, even the maintence fees are less than the early withdrawal penalty.  As for early retirement, what are your options?  If you did not intend to retire for 10 more years, try to find another job or offer to take a pay cut.  You are still provided with employment, can continue to contribute to your 401k, and earn livable income until you are prepared to retire.  If you prepared to retire in 2 or 3 years, look at your savings.  Is there enough to get you buy until you get access your 401k without the penalties?

Finally, it is important to look at the total this will cost you.  If you are in your late 20s and switching jobs, you may have only acquired $10,000 or so in your 401k.  You are young in life and would like to purchase a new car or a new home.  You think this money could come in handy and it probably would, but how much of that money are you going to see?  Continue reading on for an example, using the above mentioned $10,000.

As previously stated, there is a 10% early withdrawal fee.  Right there is $1,000.  Then, the income is taxable.  You can use the internet or call the Internal Revenue Service (IRS).  Find out what your tax rate is.  On average, most Americans pay around 20%.  You can expect this to be about $2,000.  Not only do you need to pay federal taxes on this income, but state taxes too.  Determine your state income tax.  They vary greatly.  Even if it is only 5%, that is $500.

By using the above mentioned formula, you are left with $6,950.  You paid $3,500 in penalties and taxes.  Yes, this is still money that you could use, but imagine if you let it sit in your 401k and continue to collect money.  With retirement savings, it is important to think long-term, even if you are only 20 years old.

The only individuals who should consider an early withdrawal are those considering early retirement, but there are still risks.  If 25 and switching jobs, don't cash out.  Wait until you are settled in your new job and apply for a 401k loan.  You are doubled taxed, but not charged large fees.

If you need money and have been saving for retirement with a 401k plan, you may turn to that plan.  You may want to use the money to weather your current financial storm.  If you are relatively unfamiliar with the ins and outs of 401k plans, you may be confused.  Many individuals know they are saving for retirement and that is it.  Do you have to repay the money you take out?  Are you charged fees?  It all depends because you have a couple options.

So, what are your options to access the money in your 401k account?  Your options include cashing out your 401k and taking a loan from it.  What is your best option?

When cashing out your 401k, you don't take a percentage of it.  You take it all.  This may seem like a good option if you want to buy a new car and pay for it in full.  With that said, you are charged penalties.  This penalty is 10%.  You are not charged this fee when accessing your retirement at the age of 60.  Moreover, 401k contributions are tax sheltered at first.  You are taxed when you access the money, such as with an early withdrawal.

Having your retirement savings in your hand to use at your disposal may seem like a good idea.  Yes, it will at the time.  It is important to think long-term.  Say, you have $20,000 in retirement savings.  After the 10% fee, federal and state taxes, you are left with an average total of $16,000.  For starters, you lose money.  Next, you no longer have that money for retirement.  How do you intend to survive financially without it?  You better have a backup plan in place.  If not, you could be homeless or working until you are 70 to make ends meet.

Not all employers have the option of early cash outs.  Most advise against it.  One of the few cases in which an employer will opt for early cash out is with extreme financial distress or terminal medical conditions.  The other case is with a job switch.  If switching jobs, you can leave your 401k as is and pay management fees or you can rollover to an IRA or your new company's 401k plan.  There is, however, the option to cash out early.  If you are in your early 20s and do not have a lot of money invested, you don't have much to lose.

As shown, cashing out your 401k early has many downsides.  It is risky and you lose money for retirement.  If you need cash and you need it now, apply for a 401k loan.  Most employers allow them.  These are loans, so they must be repaid.  Although 401k loans are optional, most employers will give them if you show need.  Fill out a loan application and speak to someone in your company's financial department.

The only significant downside to borrowing from your 401k is double taxation.  As with cash outs, you are taxed when you get the money.  Next, you repay that loan.  When repaying, you are taxed.  This money is not legally considered a 401k contribution, but a loan payback.  So, you are double taxed.  Still, it is usually less than the fee charged with 401k early cash out.  There may also be a handling fee, usually around $75 or less.

The only dangers of a 401k loan come from changing jobs and not making repayment.  If you do not repay your loan, your account may go to collections.  If you change jobs, your employer may shorten the term of your loan and request payment within 90 days.  If you anticipate switching jobs soon, hold off on a loan or consider waiting to make the switch.

As you can see, both 401k loans and early cash outs have their pros and cons.  If you are in financial distress, take a minute to think about the situation.  Have you considered the alternatives, such as getting a bank loan, borrowing money from family, reducing expenses, or getting a second job?  Dipping into your 401k account, even as a loan, should only be used as a last resort.

It is no secret that American businesses are suffering.  In 2008, a large number of businesses closed their doors.  It appears this practice will continue for years.  Americans who have yet to lose their jobs are concerned about the future.  Some are worried about job security and others are asked to take a pay cut.  If you are in this situation, it may leave you worried about the future.  You may opt to find a more stable job with a different company.  What if you have a 401(k) plan with your current employer?  What should you do?  What are your options?

Cash out.  This option is rapidly increasing in popularity.  One of the reasons is the poor economy.  Businesses that do stay afloat are passing on the added expenses to consumers.  You may have seen your utility, grocery, and insurance bills increase.  Some Americans must trim their budgets and cut corners.  When switching jobs, cashing out your 401(k) may sound like the best plan.  Is it really?

You, like many others, love the sound of having money in your pocket.  You can pay off your bills, put that money towards a new home, and so forth.  With that said, remember the point of a 401(k).  It is to save money towards retirement.  There is a lot of concern about Social Security and pensions.  In the past, 401(k) plans were considered supplemental plans.  Now, they are the main source of income for many during their golden years.

As nice as it is to have money in your pocket, look at the cons of early withdrawal because there are many.  For starters, you are charged a 10% early cash out fee.  Next, there is the tax factor.  Money invested in a 401(k) is taxable when withdrawn.  Combine those taxes with the 10% penalty and you may not have much left.  Those who do cash out their 401(k) plans are usually in their 20s or 30s.  They believe they have years to continue saving for retirement.  Yes, this is true, but money is lost.  There is a better alterative.  What is it?

Do a 401(k) rollover.  This option is not right for everyone.  To quality for a rollover, you must have a new job before leaving your current one.  With today's economy, this presents many risks.  What if you don't find a new job, but your current employer hears you are looking.  What if they decide, themselves, to cut the strings first?

If you are able to secure a new job before leaving your current employer, there are a number of benefits to rolling over your 401(k).  You continue to earn money, contribute to the account, and do not have to pay taxes.  First, experts recommended reviewing your new employer's 401(k) plan.  Do they match your payroll deductions or give you enough investment options?  If not, you have two alternatives.  What are they?

Rollover your 401(k) to an IRA.  An IRA is similar to a 401(k) plan in that it is a retirement savings plan.  The amount you contribute depends on your income level.  As with a 401(k), some IRAs have tax benefits.  However, there are usually more rules and restrictions.  Employees are able to contribute to both 401(k) and IRA accounts.  If you want to contribute to both and financially can, do more than just rollover your 401(k), but capitalize on both.

Leave your assets in your former employer's 401(k) plan.  This option has many risks, but it is a better alternative than cashing out.  If nearing retirement, you do not want to lose or suffer penalties from the money you saved, invested, and made.  That is why cashing out for an early retirement is not recommended, unless you have a solid financial plan in place.  Most employers enable former employees to keep their assets invested.  Unfortunately, the risks are centered on fees.  Your former employer can charge you fees for record keeping, management, and more.  Overtime, these can significantly decrease your retirement savings.

As you can see, you have a number of options with your 401(k) when looking to change jobs.  If you are nearing retirement, it may be easier to stay with your current employer.  In as little as 5 years, you may be able to retire.  If not, your best options are to rollover your 401(k) to your new employer or to an IRA account.

A 401k is a retirement savings plan.  It is funded by employee payroll deductions and, occasionally, employer matching contributions.  The money is put in a fund and invested.  Some employees opt for low-risk investments, such as short-term bonds.  On the other hand, others play the gambling game and dabble in the stock market.  Which should you choose?  Both.

On December 11, 2008, it was learned that well-known stock market expert and financial expert Bernard Madoff wasn't an expert investor after all.  What was he?  The mastermind and operator of a giant scheme.  Individuals and companies invested money into his firm.  They did so believing they were making a wise investment.  Most are still reeling from what came next.  It was all a scam.  He was using new money from new "investors," to payoff the old.  Since those who drew money off old investments actually got paid, there were little signs this was nothing more than a scam.

Those of us not affected by the Bernard Madoff swindle often just wonder how this could happen and then think about the people who lost money.  Some had their entire retirement savings wiped clean.  Those who wanted to retire in 5 years now don't have enough money.  Worse yet, those who are already retired and continue to draw money have no more money left.  Yes, it is normal to show compassion for those impacted and wonder how this could happen, but it is best to look at the situation from a lesson learned.  Those who had their entire retirement savings wiped out made a costly mistake.  That mistake was not investing in a scammer, as even the "experts," were none the wiser.  The mistake was putting all their eggs in one basket.

Not everyone lost their entire retirement savings due to Bernard Madoff.  Some just lost a percentage.  Any money lost is devastating, but at least those who spread out their investments have some money to fall back on.  This is the lesson.  Never risk everything on one endeavor.  As stated above, you should opt for a combination of risky stocks and low-risk bonds.  If one venture suffers, you still have the other to fall back on.

Returning back to stocks and the Bernard Madoff scheme do more than just diversify your stocks.  That is one note many victims made.  They invested money through this individual, but they diversified.  One couple interviewed on television believed they had stocks in Hewlett-Packard (HPQ), McDonald's Corp (MCD), and many others.  Yes, the stocks were diversified, but they only invested through Madoff.  This is another example of not putting your eggs in one basket.  You may not have control over which brokerage and money management firms your 401k goes to, but keep this in mind for personal use.  Do not rely on one person or company to carry you through retirement.

Another lessen learned is the importance of good old savings.  You should have a 401k plan.  If your employer offers a plan, you are making a mistake not to take part.  In fact, that mistake can cost you money.  Many employers match contributions made by employees.  This translates into free retirement money.  Do not pass this up.  With that said, stash away money when you can.  If you are debt-free create a plan.  Plan to deposit $100 in your savings about for every $1,000 or so you contribute to your 401k.  It will add up over time.  Do not use this money unless in dire circumstances.  This can also help to carry you through retirement, especially in the event your investments sour.

It is a terrible phrase to use, but out of tragedy their always comes a lesson.  Thousands of Americans have lost their hard-earned retirement savings.  Those who put their eggs in one basket are reeling from the effects and will be for the rest of their lives.  If you weren't affected by the Bernard Madoff scheme, take this unfortunate situation and use it as a lesson.  Do not rely on one individual, one company, or one investment, no matter how solid they appear.

In the past, Americans relied mostly on Social Security and pension plans to survive the golden years of retirement.  As the economy started to spiral downwards, so did these.  There is great concern about the Social Security Administration's ability to continue to pay retirees in the future.  Due to poor money management out of their control, many hardworking Americans are seeing their pensions shrink or disappear before their eyes.  If you are only counting on your pension and Social Security to survive retirement, you are making a costly mistake.  If you do not already have a 401(k) plan setup, get the process started now.

Most Americans are slightly familiar with 401(k) plans.  They are retirement plans.  For most, they are a backup plan.  Others are counting on their 401(k) as a major source of income during retirement.  These plans are funded by employee payroll deductions.  The money is then invested in mutual funds.  Popular investments include stocks and bonds.

Right about now, you may be questioning the safety of starting a 401(k) plan.  After all, the stock market took a huge dive in 2008.  Those with investments saw their retirement plans decrease and fast.  This has caused a panic.  Some Americans are now holding off on retirement, as they cannot survive the years financially.  Others are wondering if they should move around funds.  A lot of panic has ensued.  Is it really the best time for you to start investing?  In most cases, yes!

Right now, the stock market is at a low.  Financial and investing experts are claiming it can't get much worse than this.  They are advising investors to stick it out.  Many have the view of "the market can only improve."  Yes, this may take years.  This is however, where you are at an advantage.  If you have yet to consider a 401(k) plan, you are likely young.  You may be in your early 20s or 30s.  What does this mean?  You can play the waiting game.  You can buy stocks for cheap and wait.  Remember, most financial experts are saying they will only improve.  Since it will be at least 25 years until you retire, you can survive the market's ups and downs.

If it wasn't enough that you can invest money in stocks now, for some of the cheapest prices ever, there are many more benefits to having a 401(k) retirement plan.  One of those benefits is the tax advantages.  As previously stated, 401(k) plans are funded by employee payroll deductions.  By automatically deducting this money from your checks, you are less likely to miss it.  Moreover, your contributions are not taxable.  For example, if you earn $50,000 and contribute $2,000 for one year, your taxable income for that year is only $48,000.  The only downside is that the taxman eventually gets his hands on your money; it is taxed when used for retirement.

Another benefit of creating a 401(k) plan is employer contributions.  Most employers have plans in place that allow them to match employee contributions.  This varies greatly depending on the company in question.  Many have restrictions on the matching allowed.  For example, a new employee may get a 25% match.  Some companies will match contributions 100% or more.  Before creating a 401(k) plan, it is advised that you speak with your employer.  See if they match your contributions and by how much.  Look at this as free money.

Finally, there is the flexibility of 401(k) plans.  As previously stated, most employees opt to invest in stocks and bonds.  The decision is yours to make.  You are in control of your money.  Most financial experts recommend that older individuals opt for low-risk investments, like short-term bonds.  These individuals can suffer damaging consequences from risky investments, like the stock market.  On the other hand, those young in life are often encouraged to take a gamble.  It will usually pay off and may result in long-term wealth.

As you can see, there are a number of benefits to creating a 401(k) retirement plan and profiting from the current state of the stock market.  Now is the time to purchase low-cost stocks.  Sit back and wait as they survive the struggling economy.  If you play your cards right, your 401(k) will not just supplement your pension and social security, but it could finance your retirement years on its own.

As you know, a 401k is a retirement savings plan.  If you are nearing retirement, you are well familiar with this plan.  However, if you are in your 20s or haven't given retirement much thought until now, you may be curious about 401k investing.  What should or shouldn't you do?

DO have a 401k.  If you are not participating in your employer's 401k retirement savings program, start now.  You are never too young to save for retirement.  In fact, the earlier you start, the more money you should have in the end.  Speak to a company representative to discuss the 401k program and your options.

DON'T make the mistake of believing that now is the time to stay away from the stock market.  In fact, now is the perfect time to invest.  The stock market is at a low.  You can buy stocks for cheap.  Most financial experts state the market will turn around and bounce back, as it always does.  What does this mean for you?  A profit.

DO speak to a financial advisor.  If you are just setting up your 401k, you should have many questions.  If you only briefly catch the market report on the news, you may be clueless when it comes to stocks.  Which type of stocks should you invest in?  Which companies perform the best?  A financial advisor can help you get answers to these questions.  If setting up your 401k for the first time, your company may provide a free or discounted consultation with a financial advisor.

DON'T rely solely on the advice of a finical advisor.  Yes, these are experts in the field.  Money managers do know how to invest, but they all have been wrong.  This was seen with the Bernard Madoff scandal.  Billions of dollars were lost.  Hardworking Americans believed he was handling their money as investments, but really, he was just using it to run a scam.  Before the scandal broke, Madoff was well-known and recommended.

DO your own research first.  Luckily, the internet makes it easy for novice individuals to learn about the stock market.  Perform a standard internet search to get company names and stock symbols.  Research stocks performance over the past years.  Look for company reviews and projections.  Find stocks you believe you can profit from.  Take risks if you want, but also opt for a few "safe bets."

DON'T forget about your 401k.  After setting up your 401k account, time will pass.  Your contributions are automatically deducted from your paycheck.  It is very easy to forget about your 401k.  Do not.  You want to monitor your account.  You should get quarterly statements in the mail.  Closely examine them.  See where you are making money and losing money.

DO assess the situation if you are losing money.  Right now, in 2009, most 401k account holders lost or are losing money.  This is due to the poor economy and stock market.  Financial experts advise against pulling out now.  As it always does, the stock market will bounce back.

DON'T ignore obvious problems.  Yes, the market should start to improve soon and most companies and their stocks will bounce back, but some may be unable to survive the wait and you may lose too much.  Use the internet to research the companies you invested in.  Look for any warning signs, such as poor forecasted outlooks, a large number of employees who are complaining about layoffs or reduced hours, and so forth.

DO diversify your 401k.  If you are young and don't plan to retire for 20 or 30 years, you have the option to take risks.  Invest in high risk stocks that are profitable if they succeed.  You have time to recuperate if they don't.  Regardless, diversify, diversify, and do it again.  Opt for a collection of stocks and bonds.  For each, don't rely on one company or investment to pull you through.  Diversification prevents you from taking large losses.  If one stock plummets, you have others to fall back on.

If you have a 401k account that you actively contribute to, do you monitor it?  If not, you should start.  Some financial experts recommend little monitoring, especially in short-term troubling times, but there are always benefits to closely monitoring your 401k account.  So, how can you?

Read your account statements.  401ks are company sponsered programs.  Your company should have their own rules and restrictions.  This includes how often statements are mailed out.  Some investors receive monthly or bimonthly statements.  On the other hand, others receive statements quarterly throughout the year.  Always review your statements.  Too many individuals just toss them aside or throw them in the trash.  Don't.

Use the internet.  Most employers have safe websites for employees to login and view information on their 401k account.  In fact, on this website you may be able to make changes.  You could possibly designate new stock, make the switch to bonds, or increase or decrease your employee contributions.  You may need to contact your employer to first setup an account before using this monitoring option.

Use the provided telephone number.  If you need to access your 401k information and have no way of doing so through your statement or the internet, this is the next best approach.  Unfortunately, it is a very time consuming process, especially if you want detailed information on each stock investment.  It is best to use the phone to review the total saved in your 401k account or to learn about your recent profits or losses.  Since you do not have an account statement handy, ask your employer about whom to call.

You now know how to monitor your 401k, but why should you?  What should you look for?

Your total contributions 

Each statement will show how much money you contributed in that specific period, like four months.  It is always good to invest.  If you can, increase your contributions.  If in financial distress, it is important to trim your budget.  If you cannot trim anymore and still need money, consider reducing your employee contributions temporarily.

Your employer contributions 

Many companies contribute to their employees' 401k plans.  First, make sure you know how much your employer is supposed to contribute.  Then, review your statements to ensure it is correct.  If the amounts are different, do not automatically assume you were scammed.  It may be an honest mistake, but a mistake that you must first catch before it can be fixed.

Your stock performances 

If you invest in stocks, you will notice some changes.  It all depends on the market.  Right now, the stock market is in bad shape.  Don't be surprised to see a loss.  Most financial experts predict the market will start to bounce back soon.  You can wait it out if you wish or do more research.  Research the stocks you invested in.  Make sure it really is just a short-term bump in the road, not a long-term problem you are just realizing.

If you don't like what you see, such as you are losing money on stock, make a decision.  If you must, talk to a financial advisor.  In the year 2008, the stock market took a dive.  It was near record lows and 2009 isn't looking much better.  You may want to jump ship on an underperforming stock, but it may be best to wait it out.  Always consult with a financial advisor if you cannot make an informed decision yourself.

Read all attached documents.  Don't just look at your 401k statement.  Some companies include updates with statements.  Are you now charged maintenance fees?  Is there are free seminar coming up where you can meet with financial advisors for free?  Information like this is typically included with account statements.  Never throw anything related to your 401k away without first reading.

If you have a 401k retirement savings plan, chances are you dabble in the stock market.  Everyone, especially those with years before retirement, are encouraged to give stocks a shot.  There is a good chance that it will be a big payoff in the end.

Although stocks are a good way to generate money for retirement, there are some risks involved.  In 2008, the stock market and the entire American economy took a hit.  Many Americans were helpless as they watched their retirement savings decrease.  That is part of the risk.  That is why those nearing retirement, such as within the next five years, should avoid risky investments and start making the switch to low-risk options, such as bonds.

With that said if you are young or looking for a big payoff, now is the time to get started.  To avoid losing your retirement savings, as some Americans did, proceed with caution.  It is important to diversify your stocks.  For example, also in 2007 and 2008, the auto history took a huge hit.  They closed plants, reduced car production, laid off workers, and even asked the government for financial help.  If most of your stocks were related to the auto industry, you lost a lot of money.  If you diversified your stocks and had some from financial institutions, technology companies, and the food industry, your loss was less because you diversified your stocks.

So, how do you balance your stocks for diversification?

First, it is important to look at your contributions.  You contribute money from your paycheck.  Does your employer match those contributions?  If so, they may have set rules in place.  For example, they may only allow you to use their contributions for company stock.  In these instances, your hands are tied.  However, you should still be able to balance and diversify the money invested into the account by you, through the above mentioned payroll deductions.

Even if your employer does not require you to hold stock in the company, it may seem like a good idea.  Yes, it is, but don't rely solely on your company's stock.  This has lead to a lot of complications and money trouble in the past, like with Enron.  Buy a few company stocks, but do not put your eggs all in one basket.

In terms of 401k plans, many companies have financial advisors on hand.  Talk to one of these advisors.  They can provide you with a lot of valuable information and give you the names of promising stocks.  Although these individuals are experts in the field of money management and investing, do not take their word for it.  If your financial advisor provides you with a list of suggested stocks, don't agree to them right away.  Return home and research first.

As for the research, there are a number of steps you can take.  The internet, investing shows, and the news can give you insight into the world of stock and the companies available for investing.  Perform a standard internet search or use the stock ticker your financial advisor provided you with.  Look at the stock. 

In 2008 and 2009, most stocks were low.  This was due to the poor economy.  They should recuperate soon, but it may take time.  To you, this may look like a good opportunity.  What could be better than buying cheap stock?  Before making a decision, look at the long-term history.  Before 2007, most companies on the stock market were in relatively good shape.  If a company's stock has held steady at $2 a share for the past five years, take it as a sign it won't go much higher.

As previously stated, those whose 401k stocks relied on the auto industries in 2008 and 2009 saw a reduction in retirement savings.  By diversifying your stocks, you take a lesser hit when trouble comes.  So, find a wide range of companies to invest in.  For example, opt for food, retail, auto, technology, and financial companies.  In terms of 401k stocks, mixing it up is the best way to go.

If you are getting your first job or if you are now starting the journey to save for retirement, a 401k plan is a great place to start.  A 401k plan is a retirement savings program.  They are employer sponsored.  For that reason, you need to work for a company that has an available plan.  If that plan is available, what is the next step?

You may not have to do anything.  Some companies automatically make 401k plans a part of their compensation program.  This means that you may automatically be enrolled in a program.  Since this is rare, it is best to ask.  Even if your enrollment is automatic, it is still up to you to determine your contributions.

As previously stated, you need to ask your employer about a 401k.  If you are job searching and concerned with retirement, ask all prospects.  Even if you have yet to be hired, consider this. You want and need to save for retirement.  A 401k is a simple way to do so.  If you have two similar job offers, but only one company sponsors a 401k program, opt for that company.

401k programs are optional and company sponsored.  If your company does sponsor a program, you still may not qualify.  Some have rules and restrictions.  For example, you may have to wait 90 days before gaining admittance.  Some companies have open enrollment periods.  For example, you may only be able to setup a 401k in the month of January.  If this is the case, make a note on your calendar.  Remember to signup and setup an account when allowed.

If and when you are able to enroll in a company sponsered 401k program, you will be given enrollment papers.  Fill out these documents.  If you need any assistance, speak to a financial advisor or ask a company representative for clarification.  These documents must be completely and accurate filled out.

When completing your 401k enrollment paperwork, search for sections with alternatives.  For example, with married couples, the spouse is automatically designated as the sole beneficiary in the event of death.  If you want another family member to be this beneficiary, take the steps necessary.  If that information is not available on your form, speak to a company representative.

Also on your enrollment paperwork, you will be asked how much you want to contribute.  If in your early 20s, you can start out small.  With that said, remember that this money will grow overtime.  The more you add, the more you stand to have for retirement.  A good approach is to track your expenses.  Do this for a week, if you don't have a short deadline.  How much money do you spend in an average week?  Times this by four and add in other expenses, such as mortgage, car, groceries, utilities, and insurance payments.  Try to set aside at least $100 a month for traditional savings.  Anything extra, consider contributing to your 401k.  You can change this amount later.

Ask about employer contributions.  Many companies sponsoring 401k programs reward their employees with contributions.  For high-level and long-term employees, the match may be 100% or more.  Even if only 25%, consider this free money!

Once your enrollment papers are complete, you will be able to designate your investments.  If young, choose from a collection of money market funds, bonds, and stocks.  If nearing retirement, opt for low-risk investments, like bonds and money market funds.  Speak to a financial advisor and use the internet to research your options.  Find the most projected profitable choices.

You start a new job.  Great!  Not long, a company representative will educate you on the perks of your new job.  For many, this includes a 401k program.  Not all employers offer 401k plans.  If yours does, take it!  Social Security is unable to carry retirees through their golden years as it once did.

Although there are rarely any negative consequences to starting a 401k retirement plan, unless you decide to borrow or cash out early, you need answers to some important questions.  Someone in your company's office, possibly the person who introduced the 401k plan to you, should have these answers.

Question:  How much can I contribute?  Employee contributions to a 401k are automatically deducted from pay.  With that said, there are some rules and restrictions.  Depending on income level and company preference, there are some limits.  For most, this is not an issue, as average workers rarely contribute the maximum amount to their 401k.  Still, it is a good question to ask.

Question:  Do you match employee contributions?  This is very important to know.  If you are unsure if a 401k plan is right for you, the answer to this question may be the deciding factor.  If you are lucky and your employer matches 100% of your contributions, your investment money doubles!  401k plans with matching employer contributions is one of the easiest ways to plan for retirement.

Question:  How much do you match?  Not all employers match employee 401k contributions.  If you are in a well-known company, yours likely does.  That is one of the reasons why these companies survive.  They extend perks to hardworking employees, ensuring they stay on the job.  If your new company matches 401k contributions, there are likely to be some restrictions.  The percentage can be preset, vary depending on the hours you work or time with the company.

Question:  What type of investments can I make?  This is important, as a 401k plan varies depending on the company in question.  One of the worst things you can do is allow a "financial expert," to handle the investment for you.  Many Americans did this and many are now seeing their retirement funds washed away.  You can rely on the help of a financial advisor provided by your own company, but do your own research too.  You should be able to choose between stocks and bonds.  Mix it up a bit to ensure your money is spread out and safe.

Question:  Can I change investment options and how often?  401k retirement plans are different from Social Security and pensions, as you are in control.  Most allow you to change your investments, like by trading stocks or opting for short-term bonds.  With that said, there may be restrictions on how often these changes are made.  Even if you are only allowed a limited number of changes a year, a 401k plan is still recommended.  Just do the research to first make the right choice and choose the best investment opportunity for your personal needs.

Question:  How can I get information on my account?  Most employers make it easy for you to get up-to-date information on your account.   Some mail quarterly earning reports.  Others have the information available online and it is usually available over-the-phone.  How often you are able to receive information on your 401k investments depends on the company's updating system.  Some update their records weekly, while others opt for monthly updates.

Now that you know a few important questions to ask your employer about their 401k program, it is important to ask.  Many individuals in their 20s are unconcerned about retirement.  Some even decide not to contribute to a 401k.  Of course, it is your right, but there are many benefits to planning for retirement early.  As previously stated, some employers match employee contributions.  This is essentially free money.  Even if your employer only matches 25% of your contributions, you would be silly not to participate.