Congrats on your first job! Here's what to do with your 401(k)

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There are countless things you need to think about when you get your first full-time job: How to make a good impression on your boss, connect with your colleagues and figure out how to spend that first paycheck.

One thing that may not be top of mind: setting up your retirement account.

But making sure you're taking full advantage of your 401(k), or any other employer-sponsored retirement account your job might offer, is one of the most important steps you can take for your future financial security.

That's because every dollar you sock away now in a 401(k) will be worth much more than dollars saved later, thanks to the magic of compounding. That's when the money earned from your investments starts to generate more earnings, allowing those early deposits to grow exponentially.

"Even small amounts that you can save now have the power to grow substantially over 40 years," said Kara Duckworth, a certified financial planner and managing director of client experience for Mercer Advisors in Newport Beach, California. "The earlier you start the better."

Follow these steps to make sure you're making the most of this powerful tool:

Get the company match

To motivate employees to save for retirement, many companies will match the money you contribute to your 401(k), up to a set amount. Among employers who match a portion of retirement savings, the median employer contribution is 6% of an employee's salary, according to the Bureau of Labor Statistics. At a minimum, aim to save enough in your plan to get that match, since it's essentially free money from your employer and a 100% return on your investment.

"The hardest thing about saving for retirement is just getting started," said Ben Barzideh, a wealth adviser at Piershale Financial Group in Barrington, Illinois. "Once you set it up, very quickly after a few paychecks, you just get used to living on the new net amount, just as you do with taxes."

You'll want to gradually increase the amount you save over time until you're at 10-15% of your income. One strategy for doing that is to boost your savings rate every time you get a raise, so you won't feel as much of a bite out of your paycheck.

Build a diverse portfolio, with a focus on stocks

Most 401(k) plans have several different diversified funds from which you can select. Diversification is important, since owning many different assets can protect you from swings in the price of any single investment. But when you're saving for a goal (like retirement) that's decades away, most advisers say you'll want more of your portfolio in stocks, which have historically performed better than most other asset classes over the long term.

Not sure where to start? See if your plan offers a target-date fund, which will automatically build an appropriate portfolio for you based on your projected retirement age. The allocation will gradually shift away from stocks to more conservative investments, such as bonds, as your retirement date gets closer.

Consider the Roth option

Most 401(k) plans now allow investors to choose whether they want to contribute to a traditional 401(k) or a Roth 401(k).

Contributions to a Traditional 401(k) go in tax-free and grow tax-free, but you'll pay taxes on withdrawals in retirement. For a Roth 401(k) contributions go in after-tax, but you'll owe no taxes on growth or future withdrawals.

In general, the Roth option makes sense for those who think they'll be in a higher tax bracket in retirement, either because they have more income or because tax rates have gone up. If you're not sure, splitting your contributions across the Roth and traditional 401(k) can provide you with more flexibility later.

Take advantage of any other financial benefits your company offers

In addition to the 401(k), a growing number of companies now also offer a range of other financial benefits to employees, including student loan assistance, Health Savings Accounts, and one-on-one financial advice. Participate in as many of these programs as you can.

"For young people living paycheck to paycheck, there's no one-size-fits-all answer to managing your finances," said Edward Gottfried, director of product at Betterment's 401(k) business. "Make sure your paycheck allows you to pay down your student loans while you're socking away money for retirement and continuing to stay on top of debt and month-to-month expenses."

Once you've addressed other financial challenges in your life, you can contribute more to your retirement account without worrying that you may need the money in the short term.

Take it with you when you go

While you're likely not yet thinking about your next step on the career ladder, most employees in today's economy change jobs several times throughout their working life. You have a few options for your 401(k) when you leave your job, including rolling it into an individual retirement account (IRA) or a 401(k) at your new employer.

One option to avoid, if possible: cashing it out entirely. Withdrawing from a 401(k) before you reach retirement age can result in tax penalties -- and leave you with a smaller nest egg in your golden years.