By Patricia Uceda, Spring 2015 Graduate Research Assistant
If your employer has a 401(k) matching program, be sure to take advantage of this. If you get an annual $1,500 401(k) match from your employer, you can save $1 million by contributing just $5,475 annually to a 401(k) plan for 35 years, assuming a 7% annual return after fees, versus $6,975 annually without the match.
However, make sure to ask about your employer’s vesting schedule for the retirement plan. Some employers do not allow you to keep employer contributions to your retirement account until you are fully invested in the plan. In other cases, you may need to remain with an employer for a certain amount of time, such as 5 or 6 years, until you can keep your 401(k) match.