just received my 401k papers.. what now?

First thing is to find out what percentage of your contributions they will match, then commit to that at a minimum since it is free money. Just have it taken directly out of your paycheck, you'll never even notice it's gone.

Figure out what they will allow you to invest in, since they probably won't give you full access to the market due to cost issues. Now you invest it the same you would invest money outside of your 401k, but generally should be invested at a much more aggressive pace since you may not touch this account for 30-40 years.

Be cautious of putting too much of it into company stock. They may allow you to buy a certain amount of shares through your 401k at a discount, but remember that diversification is the key to portfolio stability. Too much in company stock is how employees at Enron lost their entire life savings.

First guy's answer is good but I think a better alternative is to put in the company max and then also open up a Roth IRA for your excess funds. That is an after tax retirement account that grows income tax free whereas your 401k is tax deferred, so this gives you a better mix of after tax and before tax accounts.

And WOW, that #3 response is all kinds of wrong. I will just correct that 401k's are accessible at 59 1/2 and not 65, and then common sense should kick in to let you know that if this guy can't even get the age right why would you ever take any other advice on the matter from him.

There are a number of avenues and decision trees that you must go through. You may want to consult with a trusted adviser to walk you through the process.

For example, if you do not sign the papers, there is an automatic enrollment that the compay must process in accordance with the Department of Labor (DoL) regulations governing the company's actions. First the automatic contribution is set at 3 percent and is invested into DoL approved options, which may consist of a balance fund or target date fund.

Next is there any company match?

Next what is the allocation to the investment options available to you based on your risk tolerance? Are you satisfied with the default investments?

Will you have outside investments or savings to complement the 401k plan to allow you flexibility in financial planning, especially for tax planning?

Also does your plan contain both traditional and Roth 401k options? Based on your marginal rate income tax bracket the Roth option may be more suitable for you.

Next what is the fee structure of the various investment options?

Do you have passive index funds (both stock and bonds) available to you that minimizes the bite from fees?

This is intended to get you started. There is more investigation, planning, thinking, and study that needs to be performed.

It simply means that your employer will deduct small untaxed amounts of monies from your paycheck that you will be able to access when you turn 65 years old. The rule of thumb is your employer will match a small percentage of it so people like you think its free money. The truth is its invested by your employer and can lose just as quickly as they are telling you it can earn. In addition, its taxable at whatever rate is in effect when you turn 65. ( What if the rate is 50 % ? ) The bottom line is you can no longer spend the money they take from you since they have it and you don't . Let me ask you this simple question . Can you name 1 person that can honestly tell you they made money with their 401 K ? If they did ,they are either too blind, can't hear, can hardly walk, cant eat , cannot travel, etc , to enjoy any windfall . Live for today because you only live once ! I know too many people who lived sparingly , saved millions only to become sick and give it all to Doctors.

sign up to have (as a minimum) the maximum percentage taken from your pay that your employer will match your contribution from your salary. For example the employer I used to work for would match dollar for dollar up to 5%. I contributed 10% for a number of years before maximizing the amount taken out to IRS limits. My employer only matched the first 5% though.