401(k) programs are one of the most popular employer-sponsored retirement plans, but they’re not one-size-fits-all. Here are five things to consider as you start on your saving journey. 

401(k) programs seem simple on the surface: the employer sponsor takes money out of the employee’s paycheck and invests it according to the employee’s preferences. The vast majority of employers who offer 401k plans also offer some kind of matching program that involves a further contribution on their part based on the employee’s monthly contributions. 

 Each employer’s plan is different, making it difficult to find useful one-size-fits-all advice on how to approach your options. 

 The options can feel overwhelming, so, here’s where to start on your search for the right advice for your 401(k).  

Figure out your contribution. 

Your first choice is how much of your paycheck will go into your 401(k) account. 

Only you can determine the amount that fits best with your current income and expenses. Many people find that if they make their contribution an automatic withdrawal, that they soon adjust to their new budget. 

Something else you should know is that with pre-tax contributions, the money you contribute now could help reduce your taxable income, which could lead to lower taxes now.  

Find out your employer’s contribution. 

Tax breaks are great, but for most people, the best thing about 401(k)s is the employer contribution. Some companies will give you a give you a percentage of your contributions, while others will match your contributions dollar-for-dollar. Either way, it’s practically free money, and a great way to jump-start some high-return retirement savings. 

But here’s what to keep in mind: this contribution-matching could come with stipulations. With some companies, you may need to be an employee of the company for a period of time before the money is vested, which means yours to keep. That vesting schedule could be gradual, and if you leave prior to full vestment, you could forfeit those employer-matched contributions. 

Check out your investment options. 

401(k) plan offerings vary wildly. Some companies offer only a few options, and some offer hundreds. 

How people choose their investments varies wildly, too, up to and including choosing an investment option based on the name of the fund, which is the investment version of choosing a car based on its color. 

Make sure you look under the hood. Research your options, and find out if they match your risk tolerance. If you’re still stuck and need to make a decision soon, a target date fund might be a good starting point. These funds help spread out your risk and automatically shift assets to more conservative investments as retirement nears.

Watch out for fees. 

In addition to understanding contribution and investment options, you should also be aware of the different fees that your 401(k) plan may incur. Think about it this way: just as your money compounds over time, so do your fees. In some cases, those fees can total upwards of 30% of your portfolio by the time you retire.

The bulk of the fees you will pay on your 401(k) plan will come in the form of asset-based fees, and can include things like investment management fees, administrative expenses, and commissions to brokers who service your account. 

One of the most common fees is a withdrawal penalty, and it’s a good idea to read the fine print on your 401(k) so you can find out what you should do if you leave your job. 

If you’re invested in a traditional 401(k) plan, and you withdraw your balance instead of rolling it over into another account, then you could suffer a 10% early withdrawal penalty, in addition to the income tax you’ll need to pay. There are a few exceptions to this withdrawal, which could apply to military reservists or those with a permanent disability, so read the fine print on possibly penalties to see what applies to you. 

Just get started!

If this sounds overwhelming, then focus on this: the most important thing about the process is just getting started. The biggest determiner of being able to retire comfortably is not the funds you pick, or the market returns–it’s regular, consistent savings. Your 401(k) doesn’t have to be perfect to be profitable; just getting started will prove valuable for your long-term growth.