I've some experience in 401K's. 21 is the perfect age to start building one and the best thing is, if your employee does matching, partial matching, or any contributions at all, it's a totally risk free return on top of anything else you might gain. You just want to make sure you're well diversified and invested in only high rated funds. Something I always did was to make sure that there was a cash reserves fund available within which you could hide out during market corrections. Always helps to have cash on hand to take advantage of opportune situations. Also make sure that you have total control of money placement and can do it easily online.
Something most folks don't think about is setting up their 401k's to automatically rebalance periodically amongst the funds they are invested in. It always assures you are taking profits and buying lower and it assures that you will never be overly invested in one sector. So you set it up originally the way you're most comfortable with, and then it automatically rebalances at whatever periods you want, annually, biannually, or quarterly. As time goes on you can change the % in each sector it rebalances to at any time.
Also your contributions are tax deductible so that is more free money. In fact, if you're single and paying a high rate, since your contributions come right off the top they would have been taxed at the highest rate you would be subject to. Say your highest rate is 34% then your making an immediate 34% on all your contributions, which lowers your overall rate. For that reason, after I was pretty much untied to a spouse, kids, or any demands on me other than what I needed, I contributed the max mount allowable. If you don't invest in anything just the return from tax savings is very significant. That is a fact many people fail to consider. Good luck
Bad investors think of ways to make money. Good investors think of ways to keep from losing money.
