Making Retirement Contributions

When you join a retirement savings plan, you decide how to invest your contributions. Usually you choose from a menu of mutual funds available through the plan. The idea is to pick a combination of funds that will help you reach your investment goal — often long-term growth if you’re in your 20s or early 30s.

Some employers enroll you automatically. That’s good, because it’s one less decision you have to make. In this case, there’s a default investment option and contribution rate. You can change that rate and choose different investments at any time. You can also opt out, which is not such a good idea because you’ll miss out on getting an early start on retirement savings.

How large the balance in your retirement plan will grow depends on the amount you contribute, the investments you select and how they perform, and how long you keep the account open.

Page (9/14)