One of the tricky things about defined contribution plans is they are rooted in government regulations but are administered through employers, who have the right to restrict the terms of their particular plan. When you are considering alternate job offers, asking for details about the respective company retirement plans may be an important factor in your decision. Say Company A is offering you the same salary, a health club membership, and an extra week of vacation. Company B is stingier with the time off and frills like health club memberships but is willing to match dollar for dollar, up to 3 percent, of your wages contributed to their 401(k). Over five years you have just awarded yourself a 15 percent raise on top of anything the company may be offering in terms of cost-of-living adjustment or bonus.

The before-tax dollars the government allows you to contribute at work are $15,000 for 2006. The limit will increase by $500 per year thereafter. People over fifty years old can elect to make additional contributions to catch up. As of 2006, the catch-up amount is $5,000; it will be tied to cost-of-living indexes in years to follow, going up in $500 increments. Keep in mind that your employer may have a lower limit. It is possible to contribute after-tax dollars but these, too, have limits, also determined by the IRS.