I'm 22 and Lost When It Comes to My 401(k). How Do I Start Planning for Retirement?

Group 1 - The importance of starting a 401(k) early is emphasized, as it allows for more time for money to grow and compound, which is a significant advantage for young workers [1][6][8] - A 401(k) is defined as a tax-advantaged retirement savings plan where contributions are automatically deducted from paychecks, and employers may offer matching contributions [3][4] - The average employer match is reported to be 4.6% of an employee's salary, with a median of 4.0%, highlighting the potential for additional savings through employer contributions [5] Group 2 - Experts recommend contributing at least enough to receive the employer match, as this is considered "free money" that enhances overall contributions to the 401(k) [4][6] - For the tax year 2025, the maximum contribution limit for individuals under 50 is set at $23,500, increasing to $24,500 for tax year 2026 [7] - The difference in savings required when starting a 401(k) at age 22 versus later in life is significant, as early savers benefit from compound interest over a longer period, resulting in lower annual savings requirements [8]