How much should I contribute?
How much of your income you should defer to your 401(k) depends on what you can reasonably afford, how much your employer will match in contributions, your current age, and how much you have already saved. As a starting point, understand that you will maximize the amount you save by deferring enough to qualify for all matching employer contributions. For example, if your company will match your contributions or a portion thereof to up to 6% of your earnings, then you should consider that a minimum amount. Of course, if foregoing 6% of your pay makes it difficult to meet your necessary expenses, you should start with a lower percentage and increase it as your income increases. CNN Money offers an online tool to help you determine how much you should aim to put away each year based on your age, income, and current savings: http://cgi.money.cnn.com/tools/saveyoung/index.html?iid=EL.