Tip Of The Week

Start your 401(k) as early as you possibly can. Contributing is a pre tax deduction from your paycheck, so you never actually get the chance to spend the money on anything else.

Keep in mind, contributing to your 401(k) will do a number of things:

• This is a tax-free savings account that gains excellent compounding interest.
• If you are 25, and deposited $2000 over the course of a year (less than $100 per paycheck) and never ever contributed a single cent, in 40 years, when you are ready to draw on this money, it would be worth $32,000. Just think if you contribute this small amount amount of money every year from now until you are 50. You will have a "nest egg" worth over $1,000,000 when you turn 65. Big freekin egg huh.
• Contributing to your 401(k) could drop you into a lower tax bracket, because you are lowering your taxable income. This means that you could possibly make more in "take-home-pay."

I did not even address the fact that most employers will match your contribution, or contribute a % of your total salary to this account every year (it's like an extra bonus that doesn't get taxed)

If you want more information, see your employer's benefits coordinator and ask him or her to show you the ins and outs of your company's system.

http://www.fidelity.com/