Smart401k Blog

Investing in Your 401k Even if it’s a Small Investment

by User Not Found | Dec 21, 2015

Don’t let youth, inexperience, or an entry-level salary keep you from investing in your 401k. Too many young people tell me they’re avoiding retirement investing because they don’t think their small contributions will matter.

Well, that’s a terrible excuse.


It feels like it was yesterday that I started my first corporate job. I still remember new-hire orientation and the whirlwind of benefits paperwork to complete. There were so many decisions to make. My head was spinning.

In reality it wasn’t yesterday. It was almost 20 years ago. But, with the help of a wise mentor, I made some good decisions back then – especially when it comes to retirement investing. Beginning with my first paycheck, I contributed a small amount to my 401k account.

Over the years, the economy has been up and down, and my financial situation has seen meeker times and success. Through it all, the growth of my early contributions has helped me stay positive and engaged in retirement investing. I didn’t understand it at the time I started saving for retirement, but a little something called compounding would keep my somewhat meager initial investments working year after year. Compounding is the result of interest earning interest, so a small amount of money can grow to be larger over time.

For many 20-somethings, it may seem outlandish to think about putting money aside that won’t be used for 40 years or more. But pay heed when you think about investing in your 401k - compounding has given me a gift. It’s shown me that the minor sacrifices I made in order to contribute to my 401k account almost 20 years ago were worth it.

Once I started to see what my small savings could do, I set goals to increase my contribution each year. Ultimately, I wanted to be in the club of investors saving the maximum amount allowed (the maximum the IRS will allow is $17,000 this year). For me, at least, reality continues to get in the way of reaching my savings goal of maxing out those retirement contributions.

Like so many Americans, my husband and I are raising a family, paying home improvement and maintenance costs, putting money aside to help our kids pay for college and saving for emergencies. While I understand how important it is to save for retirement, I also have to be realistic. So, while I haven’t been able to save the maximum amount just yet, when I see the contributions I’ve made growing over time, it makes me feel much better about my choices.

For some, my small contributions to retirement early on may seem inconsequential, but I know the money I contribute will compound over time. And, with my head in the game and consistent attitude about my retirement savings, I’m not giving up on my goal to, someday, have the ability to contribute the maximum allowable amount.

Because I’ve regularly socked money away in my retirement plan, I’ve enjoyed compounding growth, a term I couldn’t have cared less about 20 years ago. Now it means less stress for my retirement planning strategy.

Shannon Duncan
Vice President of Marketing & Operations 

photo credit: Unhindered by Talent

Return to the Smart401k Blog homepage>>

About Smart401k

Smart401k is a web-based investment advisory service providing unbiased recommendations to help people invest in employer-sponsored retirement plans. Smart401k provides service to nearly 11,000 clients who collectively have more than $2 billion in assets. Plan participants receive personalized, fund-specific investment recommendations and the support of professional investment advisers available to discuss all investment questions. Based in Overland Park, KS, Smart401k is online at

Leave a comment