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Unlike a traditional pension plan, where the company contributes all or most of the money for you, your company may give you the opportunity and responsibility to build up retirement investments with a 401(k) plan. You must decide to:

• Sign up for the plan (or opt out of the plan if your employer has automatic enrollment) and;
• Designate part of your salary to go into the plan's funds.

First you need contributions. There are three basic types of contributions that can be made to a 401(k) plan:

• elective contributions;
• voluntary after-tax contributions; and
• matching contributions by your employer.

In addition, you may be able to roll over 401(k) or other plan funds from a previous employer or from an IRA.

After contributions (and any rollovers from other plans) are made, the funds are invested. You'll need to decide how your funds are to be invested and how you will monitor them once they are invested. See the section Managing Your 401(k) Plan Investments.

Your money stays in the plan unless you borrow from the plan or take a withdrawal. You need to identify a beneficiary.