Companies offer retirement savings plans.  However, the challenge can be in both saving and withdrawing.

Most employers offer 401(k) plans to employees, as a means of encouraging savings for retirement. Some are generous enough to offer matches, although there are fewer of those today than in the past. Even after decades of the existence of the 401(k), you most likely have questions, according to USA Today's article  “401(k) limits: 7 answers to your top retirement plan questions.”

When can I start building my 401(k)? Some employers let you start with your first paycheck. Others have a waiting period. Enroll as soon as possible to get your money growing.

How much should I save? Remember to adjust your savings rate as time goes on. If you get a raise and you are able to do so, increase your savings. If you start by saving 5% of your salary, move up to 10% when you're more established in your career, then closer to 15% when retirement is on the horizon.

What about taxes? Most 401(k)s are “tax deferred,” meaning that your contributions are made with pre-tax dollars. If you contribute $250, your take-home pay is reduced and so is your tax burden. Note that you don't pay taxes on capital gains, interest or dividends.  However, the IRS does take its share, when you withdraw funds during retirement.

When do I withdraw my retirement money? You can start taking withdrawals from your 401(k) any time after age 59½.  However, you'll have to pay income taxes. If you are younger than that, You must pay income taxes PLUS a 10% early withdrawal penalty. That's a retirement no-no. You can take a loan from your 401(k)—$50,000 or half your total savings, whichever is lower.  However, you must pay yourself back with interest. Penalties can add up quickly, so only do this in an emergency.

How much can I sock away? If you're under 50, you are limited to a $18,500 contribution in 2018. If you are over 50, an additional $6,000 is allowed to help you catch up.

Can I save more? You might be able to use a traditional IRA or a Roth IRA. It depends upon your age and your income level. Talk with an estate planning attorney about how to best structure your savings to max out retirement savings and tax benefits.

What if I get a new job? If you have saved more than $5,000, you can leave the money in the account.  However, don't forget about your 401(k). If it's less than that, your old employer will want you to roll the money into a different retirement account. If you don't respond to their request, it's possible that they will send you a check, minus taxes and early-withdrawal penalties. Don't lose money because you forgot to transfer your money!

Reference: USA Today (July 1, 2018) “401(k) limits: 7 answers to your top retirement plan questions”