Question:  The perm job you guys got me offers a 401(k) plan. I know I need to save for retirement, but I've been trying to set aside a little money in a savings account each month. I dip into it occasionally, but the balance keeps growing. Is that enough?

Answer:  A 401(k) plan is a nice benefit, and it can be a good investment choice for some people. Since we aren't financial advisors, and we don't know all the details of your current situation and goals, we can't really give you specific advice. What we can do is share with you some general things that you might want to think about.

One of the most powerful features of a 401(k) plan is that money set aside for retirement is taken out before taxes are calculated. That can lower the amount of tax you have to pay which means that some of the money you are now saving is money you would have had to pay in taxes if you weren't saving. This can make it a little easier to save more money that you might otherwise think you can.

Another key benefit is that the savings are automatic. Most people find it very easy to spend whatever money they receive. Think about your last raise. It was nice for a bit. If you're like most people though, you probably found that your spending habits got used to the new amount, and before long it was almost like you didn't even have a raise. More money was coming in, but you didn't really have all that much more to show for it. It can work in the other direction as well. If the money goes out before you see it, before too long you don't even miss it.

Now, since you mention dipping into your savings from time to time, you should understand that money that goes into a 401(k) plan is in that plan until retirement. It is your money. You can get to it early if you need to, but you will pay a substantial penalty for taking money out early. That means you must be sure that you are the type of person who can leave that money alone and not pull it out for any little need or whim.

You should also understand that most 401(k) plans will involve some kind of investment in stocks or bonds. Some of those investments may go up and down in value, so you'll need to decide how comfortable you are with risk.

All of that said, retirement is not nearly so far away as it seems. The sooner you start planning for it, the easier it will be to meet your financial goals. A 401(k) plan can be a good tool for beginning that planning, so it's certainly worth considering if you have access to one.