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Originally Posted by firstdown
Very good info here. The only thing I would add is when investing in your employers retirement program do not put all you money into the companies stock. Think Enron not only did all those people loss their jobs they lost their retirement saving because they had all their money invested in Enron.
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Great point, diversification is important. Don't put all your money in one company or even one mutual fund, spread it around so you're invested in US stock funds, international stock funds, small company funds and large company funds.
My favorites for retirement accounts:
Fidelity Contra Fund (large cap US)
Fidelity International Discovery (international stock)
Vanguard Small Cap Index Fund (small cap US stock)
I do a mix of these three. I'm 30, and am about 50% Contra Fund, 25% International Discovery, and 25% VG Small Cap Index. You're young too, so a similar mix is in order for you.
They all keep expense ratios fairly small, which means more money stays in your account. There are lots of other great fund options out there though, you can research on Morningstar to learn more about them. The most important things to look for are the expense ratio (target funds with less than 0.5%), and make sure it's a no-load fund (which is a fee to make the initial investment).