Why this week matters
Many companies auto-enroll new employees at a low contribution rate — often 3%. That means money is coming out of your paycheck no matter what. The question is whether you're capturing your full employer match and investing in the right funds.
Biggest rookie mistake: Accepting the default contribution rate without checking if it's enough to get the full employer match. If your employer matches up to 6% but you're only contributing 3%, you're leaving free money on the table every single paycheck.
The three decisions to make right now
- Decision 1 — How much to contribute: At minimum, contribute enough to get the full employer match. That's your floor, not your ceiling.
- Decision 2 — Roth or Traditional 401k: If your employer offers both, choose Roth if you're young and in a low tax bracket. Same reasoning as a Roth IRA.
- Decision 3 — Which funds: Look for index funds with expense ratios under 0.20%. A Target Date Fund is an excellent default if you don't want to choose.
Reading your fund options
Your 401k plan will list 10-30 fund options. It's intimidating. The good news: you only need to find one or two good ones. Look for: expense ratio (lower is better — under 0.20% is excellent), fund type (index funds beat actively managed over time), and diversification (a total market or S&P 500 fund covers you well).
Upload your 401k documents and we'll decode your fund options in plain English.
Decode Your 401k →