Future You, Funded

Enroll in your employer 401(k)

A 401(k) is the most powerful savings tool most people have access to — and a lot of people never actually enroll in one. It's not automatic. You have to sign up. Until you do, you're building nothing for the future. This step is administrative, but it's one of the highest-leverage things you can do.

1. 1

   Log into your company's HR portal or benefits system. Look for '401(k)', 'retirement', or 'benefits enrollment.' If you can't find it, email HR and ask: 'How do I enroll in the 401(k)?'

2. 2

   Set your contribution to at least 1% to get the account open and active — you'll increase it in the next step. Starting at 1% beats waiting until you can afford 10%. If your plan offers a Roth 401(k) option, it's usually the better choice — especially early in your career when your tax bracket is lower than it will be later. You pay taxes now at today's lower rate; everything grows and comes out tax-free in retirement.

3. 3

   Choose your investments. If you're not sure what to pick, select the target-date fund closest to your expected retirement year (e.g., 'Target Date 2055' if you plan to retire around 2055). It automatically adjusts over time. You can always change this later.

4. 4

   Confirm your beneficiary. Name someone. This takes two minutes and matters more than you'd think.

5. 5

   Verify contributions are showing up on your pay stub within the first pay period. If nothing changes, follow up — enrollment sometimes requires additional steps.

Increase contribution to capture the full employer match

Employer matching is the only guaranteed return in investing. If your employer matches 50% of your contributions up to 6% of your salary, contributing 6% gives you an immediate 50% return on that money before it's ever invested. Leaving any match on the table is turning down part of your compensation. There is no argument for not capturing the full match.

1. 1

   Find your exact match formula. It's in your benefits documentation or HR portal. Common examples: '50% match up to 6% of salary' or '100% match up to 3%.' The exact numbers matter.

2. 2

   Calculate the contribution percentage needed to capture the full match. In the examples above, that's 6% and 3% respectively.

3. 3

   Update your contribution rate to that number. Log back into your HR portal and change it. This is a five-minute task.

4. 4

   Check your next pay stub to confirm the new contribution is being withheld. The match often shows as a separate employer contribution.

5. 5

   Do not increase beyond the match amount yet — that comes in Stage 6. For now, capturing the match is the entire goal.

Open a Roth IRA

A 401(k) is tied to your employer — they set up the plan, choose the investment options, and contributions come straight from your paycheck. An IRA is yours. You open it yourself at any brokerage, choose your own investments, and it follows you regardless of where you work. The contribution limit is lower ($7,500/year vs $24,500 for a 401(k) in 2026 — both subject to change annually), but the flexibility and investment options are better. A Roth IRA specifically means you contribute after-tax dollars now, and everything — growth, dividends, gains — comes out tax-free in retirement. For most people in their early earning years, that's worth more than a traditional IRA's upfront deduction, because you're likely in a lower tax bracket now than you will be later.

1. 1

   Choose a brokerage. For most people, Fidelity, Schwab, or Vanguard are the right answer. No account minimums, no gimmicks, and a long track record. Avoid brokerages that charge trading commissions or account fees.

2. 2

   Go to the brokerage's website and open a Roth IRA. You'll need your Social Security number, a bank account to link, and about 10 minutes. The account type is 'Roth IRA,' not 'traditional IRA' and not a taxable brokerage.

3. 3

   Fund the account. Transfer something — even $50 — to activate it. You can contribute up to $7,500 per year ($625/month) if you're under 50 — this limit is for 2026 and is subject to change annually. Income limits also apply: for 2026, contributions phase out between $153,000–$168,000 (single/head of household) and $242,000–$252,000 (married filing jointly). If you're above those limits, look into the backdoor Roth IRA — a legal workaround where you contribute to a traditional IRA and immediately convert it to a Roth. It's a few extra steps, but the same end result.

4. 4

   Don't leave the money in cash. Until you invest it, it earns almost nothing. Move to the next step immediately.

Choose your investments

An unfunded or uninvested retirement account is just a savings account with extra steps. The money doesn't grow until it's invested — and 'sitting in cash' is one of the most common mistakes people make after opening a Roth IRA. You don't need to pick the perfect investments. You need to pick something reasonable and start.

1. 1

   The simplest choice that most investors can't beat: a single target-date fund. Find the fund with the year closest to when you expect to retire. It holds stocks, bonds, and international funds in a single package that automatically shifts more conservative as you approach retirement. Done.

2. 2

   The slightly more hands-on choice: a three-fund portfolio. One US total market index fund (e.g., FSKAX at Fidelity or SWTSX at Schwab), one international index fund, and one bond index fund. A rough starting split for most people in their 20s–30s: 80% US stocks, 15% international, 5% bonds. Adjust based on your risk tolerance.

3. 3

   What to avoid: individual stocks, sector funds, actively managed funds with high expense ratios (anything above 0.5% per year is worth questioning), and anything a friend or social media told you was a sure thing.

4. 4

   Check the expense ratio (ER) of whatever you choose. Index funds typically charge 0.03%–0.20% per year. That's the cost of owning the fund. Lower is better.

5. 5

   Set up automatic monthly contributions if your brokerage allows it. Investing monthly, regardless of market conditions, removes emotion from the equation.

6. 6

   Write down what you chose and why. You'll thank yourself the next time markets drop and you're tempted to change course.