If you’ve never tried setting up a 401(k) for yourself, you may not know exactly what to do. Navigating the world of finances after graduating from college isn’t exactly easy, and, depending on your degree, you may not even have learned these things in school. As providers of instant approval payday loans, we understand how treacherous finances can be. Here are some tips on how and when to set up a 401(k) that will serve you well in the long-run.
Start Saving ASAP
Loans, rent, utilities and food can easily eat away your monthly paycheck when you’re in your 20s. But keep in mind the sooner you start saving, the more your money will compound over time. Ideally, you will be putting 10 percent of your gross wages towards your retirement fund as soon as possible. If this number is too high for you, start at four or five percent and work your way up to 10 percent when you get bonuses and raises.
Have Your Employer Match
The exact terms of when and how much your company will contribute to your 401(k) depends on the individual situation. If you need to work at your office for a certain amount of time before opening up a 401(k), make sure you take note of the date that you can start so you can begin saving right away.
Don’t Cash Out Early
If you ever switch jobs, it’s best not to cash out your retirement account just yet. If you do so before you’re 55, you’ll receive a 10 percent early withdrawal penalty and get taxed on the amount withdrawn. Consider leaving it on the old account, move it into your new employer’s account or transfer it to an IRA.
If you have questions about instant approval payday loans or setting up a 401(k), Short Term Loans is here to help!
