Today I’ll start the countdown of my Ten Ground Rules for 401(k)/403(b) Success. These are common sense guidelines I have refined from nearly three decades of talking with clients and observing their results within employer-sponsored retirement plans.
The first rule seems so simple and obvious as to be unnecessary: Start. Get started. Enroll in whatever plan your employer makes available. It’s surprising how many people delay their participation in retirement plans. There are always reasons: you’re new on the job and not familiar with the plan, or you feel you can’t afford to, or you mean to get involved but just hadn’t gotten around to it. Would you fail to sign up for your employer’s health insurance benefit? Would you not take any vacation because you hadn’t gotten around to understanding the time-off rules? Of course not. Building your personal net worth is just as important, it’s just not as immediate. So focus on your employer’s plan, ask for guidance if you need it, and enroll.
Some people get frustrated by articles stuffed with numbers showing how much money you need to save to retire. That frustration can cause them to avoid participating altogether and make the goal even harder to reach. Don’t worry about goals, not yet. Just get in your plan and start contributing. Without a start, the rest of my rules won’t do you any good.