So you’ve finally joined the working world, or you’ve made a career move and started at a new company, or you’ve just finally reached the age where your dad begins to ask, are you investing? Do you have a 401(k)? While the idea of starting a 401(k), or investing for a retirement that is decades in the future seems difficult and a bit ominous, here are a few helpful tips that will hopefully make the process seem less taxing.

• Begin investing…now – While it may seem unnerving, the sooner you begin saving for your future, the more you will have when you retire. Check with your employer first, as many offer plans where you can contribute a portion of your paycheck to your 401(k) fund. 401(k) contributions are tax free too: you only pay taxes at retirement, when you begin withdrawing the money.

• Utilize company matching – Most companies will chip in a certain percentage of the money you contribute to your 401(k), so in order to maximize your investing, consider contributing at least the full amount that your company will match.

• Consider saving beyond your company match – Many investors suggest putting away around 15% of your income toward retirement, so if your company match totals 8% of your income, then consider contributing an additional 7%. Although there are no requirements, many suggest having enough in your 401(k) to equate to about 75% of your current annual income. However, as your income increases, you may want to increase the percentage of the income you contribute. Many companies even offer automatic annual increases.

• Avoid dipping into your 401(k) – Although many fall on difficult financial times at some point, or we all recall a time when we were living paycheck-to-paycheck, don’t allow those circumstances to force you to take money out of your 401(k). Not only will you incur a tax penalty, you will also be undoing the work you’ve put toward your future. If you establish an emergency fund that is equivalent to 3-6 months worth of expenses, you can avoid dipping into your 401(k).

• If you move companies, don’t withdraw your 401(k) – Cashing out your 401(k) before you are retired will cause you to both owe in taxes and pay a withdrawal penalty. However, if you do move careers or switch jobs, options include rolling your funds into your new employer’s plan, keeping your money with your previous employer plan, or moving the funds to an Individual Retirement Account.

No matter how or when you decide to start investing in your future, consider talking with a financial advisor. They can provide counsel in when to invest, where to invest and how much to invest, and ultimately help you feel more prepared and less anxious about retirement. Retirement is meant to be a period of life where you slow down and relax, and worrying about your financial stability during that time should not have to be one of your extracurriculars.

If you have any questions about how to setup or roll over a 401(k), please contact me at [email protected].