Like HowStuffWorks on Facebook!

5 Tips for Setting Up Your Employee Benefits

Make the Most of Your Retirement Plan

When you start a new job, retirement is probably the last thing on your mind -- especially if you're young. But let's face it; you, too, will grow old. And if you gloss over the details of your employer's retirement plan, your "golden years" are going to bite.

Retirement benefits vary considerably among employers, but these days most offer some type of defined contribution plan. Under this type of plan, the employee or the employer (or both) makes contributions to an individual investment account like a 401(k). The amount paid upon retirement depends on the value of those investments.

As you set up your benefits, scope out ways to maximize your retirement savings. For example, many employers will match some contributions you make to your retirement account. A common match is 50 cents on the dollar for the first 6 percent you save. This means that if you make $5,000 a month (lucky you!) and contribute $300 to your retirement plan, your employer will give you an additional $150. You wouldn't ignore someone shelling out 150 bucks on the street, so you shouldn't pass up your employer's $150 match, either.

But don't stop there. Financial planners recommend that you save 10 percent of your salary for retirement. So set up an automatic withdrawal to get that money out of your account before you can get your hands on it. If you can't afford that much at first, find out if your employer offers an auto-escalation option that will automatically increase your savings rate over time.