If you've been waiting for a better time to start contributing to your 401(k) -- holding out for the market to improve, your income to go up, or your bad haircut to grow out -- it's time to stop stalling.

Creating a solid retirement savings isn't about timing, it's about time. A 401(k) retirement account works only if you start one and stick with it. Consistency is the key. And don't take my word for it -- take a look at some data compiled by the Employee Benefit Research Institute and the Investment Company Institute.

Piling up money
On average, investors with a 401(k) accounts saw a 79% increase in their account balances from the end of 1999 through 2006, according to the data. That's an average annual growth rate of 8.7% over seven years. That takes into account the contributions, investment returns, and any loans.

Those who are young and just getting started saw their accounts expand a lot more, on average. Your 30s might be the most important decade for your retirement, but you can make some pretty big strides if you get the ball rolling in your 20s. Take a look at the average gains by age:

Age Group

Total Increase in Value







Did these investors do anything special? Most of them probably just spent an hour filling out some paperwork to get their accounts started, then checked in every once in a while. The real trick? They stuck with it, even through a stretch when the market saw significant down days.

Be above average
You can see your 401(k) grow by leaps and bounds, too, and maybe even beat these averages. Here's how:

  1. Get started. You will go nowhere if you never start saving. Today's the best day to begin.
  2. Grab the free money and run. If your employer offers a 401(k), chances are pretty good that they offer incentives for you to save. That means you probably get a matching contribution from your employer for stashing money in your 401(k). Talk to your employer and find out how to maximize your matching contributions.
  3. Be Foolish. Sift through your investment options with some Foolish criteria in mind. Head over to the 401(k) center and learn how you can separate the winners from the losers among your investment choices. You may even be able to take a look at this list of features and pick your investments over lunch.
  4. Don't touch the money. Your 401(k) probably lets you take a loan against your balance, but resist! Imagine how much higher the average 79% gain might have been if no one borrowed from their accounts. You're only hurting your own retirement.
  5. Wait. That's so easy, you don't even have to lift a finger. Just let time do its thing. Your contributions will add up, a little at a time. Your investment gains will compound, a little at a time. Before you know it, you're ready for retirement.

That didn't take too long, did it? Now that you're on the easy street to retirement, you can fine-tune your plan by delving more deeply into some of the advice dished out by Robert Brokamp in his Rule Your Retirement newsletter. He'll make it easy on you, too. He'll tell you exactly what you need to know, and even let you poke around free for 30 days.

If you need more help ...

  • A little tough love might set you on the straight and narrow.
  • Make sure you're not getting ripped off by your employer.
  • Make a few retirement resolutions.

Fool contributor Mary Dalrymple likes doing everything the easy way, and she welcomes your feedback. The Motley Fool has a disclosure policy.