Encourage Your Kids to Start Saving Early

Many younger workers don’t sign up for their 401(k) because the process feels too overwhelming. The last thing you want to do is add to the confusion by launching into a long lecture on asset allocation. A better tack, says Brigitte Madrian, a Harvard economist who studies the behavior of 401(k) participants, “is to break up the process into smaller pieces.”

Your first goal: Encourage them to contribute enough to get the employer match, without worrying about sorting through all the investment options. Just have them stick the money in a target retirement fund (or if that’s not an option, a stock-index fund).

You can talk to them later about boosting their contribution and fine-tuning their strategy.