At Personal Finance, we have grown increasingly concerned with the national trend toward underfunded retirement plans. As a service to our subscribers, for the next few weeks we’ll send you a complimentary series of focused briefs to get you thinking about new ways to maximize performance both inside and outside of a structured 401k or similar plan. We hope you’ll find these briefs useful … if they are not applicable to your situation please click here to stop receiving the series.

Not many people know it, but 401k plans haven’t been around that long – only since 1980, when Congress gave the go ahead to companies to create their own defined contribution plans.

Before then, most companies offered pension plans, where the responsibility for choosing investments and tracking portfolio performance fell on employers and not employees.

But then the 401k plan came along, where the opposite occurred. Now employees call their own shots, pick their own mutual funds, and decided how much they will invest in them.

Hey, this ain’t your father’s retirement plan.

But American workers don’t have to go it alone when handling their 401k plans. Virtually every company offering them is eager to help employees with their plans. Most also offer access to the investment companies that distribute and manage 401k plans for companies.

One place to start with questions on your 401k plan is your companies’ human resources area. Staffers there are trained to keep up with the latest in 401k plan developments and keep you informed about your company’s plan and procedures. When you go, remember to be prepared and bring your plan records.

What questions can you ask your HR department? Here’s a sampling to get you started:

What benefits do I get from a 401k plan? – The primary benefit is that you’re not taxed currently on the portion of compensation that is placed in the plan. You also have the option of choosing between cash or future benefits on a year-to-year basis, thus protecting you in the event of a short-term financial emergency.

Another benefit of 401k plans is that the contributions you make to the plan accumulate tax-free until you retire and begin withdrawing funds from the plan. But in retirement, you’ll likely be in a much lower tax bracket than in your age-earning years.

401k plans also offer an employer matching provision in which the employer makes a contribution to the plan equal to (a certain percentage of) your contribution. Basically it’s free money – and the more you invest, the more your company will match (up to a limit).

How much can I contribute every year? – In 2014, Uncle Sam allows 401k plan participants to contribute $17,500 in 2000.

The catch-up contribution limit for employees aged 50 and over who participate in 401k, 403b, most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $5,500

What does “pre-tax” mean? – When you contribute to your 401(k) account, money gets invested before federal and most state income taxes are calculated. That means you are being taxed on less money than you’ve actually earned. Your money goes to work for you and continues to grow, earning interest and capital gains on a tax-deferred basis.

How do I make contributions to the plan? – It’s easy. Your company will simply withhold your 401k contribution from your paycheck and redirect it to the investment firm managing your 401k. Since it’s tax-free, you’ll hardly notice the reduction in your pay.

Where does my plan money go? – An estimated 50 percent of 401k plan assets were held in mutual funds at year-end 2013. The remainder of assets were managed by insurance companies, banks, and other institutions.

Also, don’t be reluctant to ask about 401k plan fees. Most don’t charge commissions and it’s a big red flag if they do. The investment firm that manages your plan is paid a fee based on the percentage of your 401k plans assets. But some companies handle fees differently. So make sure to ask your human resources contact how plan and fee expenses are paid – and what your portion of the bill is.

While you may not get an answer to your 401k questions right away, you’ll get them eventually. It’s in your company’s best interests to have employees who know what they’re doing when it comes to managing their 401k plans.

If you can’t get an answer from your company, go ahead and drop us a line at The 401k Millionaire – we’ll answer your question within three days.

Good luck, and good 401k savings – and I’ll see you next week.

Brian O’Connell is an investment analyst at Investing Daily, and the editor of The 401K Millionaire. An ex-Wall Street bond trader, he has appeared as an expert financial commentator on CNN, NPR, Fox News, Bloomberg, CNBC, C-Span, CBS Radio, and many other media broadcast outlets, and is the author of two best-selling books on retirement investing.

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