Investing for a 21-Year-Old
Legal drinking age has no investment significance. Full legal capacity for financial accounts has existed since age 18. At 21, focus on understanding employer benefits: does your employer offer a 401(k)? What is the match formula? Is there an HSA option if you have a high-deductible health plan? Review your benefits enrollment paperwork carefully, as defaults may not be optimal.
Many 401(k) plans auto-enroll employees at 3 percent contribution, which may be below the match threshold. Check your plan and raise your contribution percentage to capture the full match. You can increase it in small increments (1 percent at a time) to minimize the paycheck impact.