1. Deferral Rate – How much can you contribute each pay period? Most experts recommend contributing 10% – 15% of your paycheck to be on track for retirement. This may not be possible when you first begin working, so start with a smaller amount – 5% – 6%, then increase it annually by 1%- – 2%.

2. Pre-Tax or Roth – Do you want to make your contributions pre-tax or Roth? If you contribute pre-tax dollars then you get a tax break up front which may lower your current income tax bill. When you retire and withdraw funds, withdrawals (contributions and earnings) will be considered ordinary income and taxed at your current tax rate. When you make Roth contributions with after-tax dollars, there is no tax break upfront, but in retirement withdrawals of contributions and earnings are tax-free.

3. Employer Match – You should know if your employer matches contributions and if so what percentage. A common match is the safe harbor match, where the employer matches 100% of the first 3% and 50% of the next 2%, so if you contribute 5% you will receive 4% from your employer. Ideally you want to contribute enough to get the full match from your employer.

4. Investment Selection – Most 401(k) plans offer a variety of mutual funds, ETFs or index funds. The goal is to diversify your portfolio across stocks, bonds and cash based on your risk tolerance and time horizon. Some plans offer Target Date funds which automatically adjust your allocation to stocks, bonds and cash as you get older and closer to retirement. The allocation will be more aggressive (higher allocation to stocks) the further you are from retirement and become more conservative (lower allocation to stocks) as you get older.