5) Retirement Planning

A 401(k) is a retirement account offered by your employer.

• You tell your boss to take a percentage of your salary (e.g., 6%) and put it directly into this account before you even see it in your bank.
• The Employer Match is the most important "trick" in American finance. Many companies say: "If you put in 6%, we will also put in 6% for you." This is a 100% return on your money instantly. It is literally free money.
• Vesting is the catch. While the money you put in is always 100% yours, the company’s match might take 3–5 years to become yours. If you leave the company before then, you might lose part of their contribution.