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Congrats! You've Been Auto-Enrolled -- Now What?

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Congratulations! You were just automatically enrolled in a 401(k) plan by your employer. Should you be relieved or should you call the police?

If you are like millions of other Americans, you should be thankful. Chances are you spend a little too much, save way too little and carry more debt than you would like. Auto-enrollment is your employer's way of helping protect you from yourself. Time for a high five! And also time to start writing your bucket list while your retirement savings grows.

Your employer made choices around the details of your auto-enrollment, but you should review to ensure that they meet your specific needs. Consider these key questions:

1. Are you contributing enough from your paycheck? In many cases, employers choose a starting rate that is fairly conservative (3-4 percent of your pay). Some experts say that number should be closer to 10 percent. If you cannot afford 10 percent right away, check your employer's plan. Many offer an annual automatic increase that gradually gets you to 10 percent or more over time.

2. Are you investing your money in the right investment options? Similar to your savings rate, your employer probably chose a default investment option that is relatively conservative. The choice may be perfect for you, but it is something you should review. For many of us, the key is to be well diversified in options that reflect our own risk tolerances and timelines. Your 401(k) service provider likely offers easy online investment assessment tools to help you figure out what the best options are to address your specific needs.

3. Should you be participating at all? For most people, yes. Research indicates we are living longer and longer and along with that, health care costs will continue to outpace inflation. A common reason I often hear from people not participating in a 401(k) plan is that they need to pay down debt first. Managing debt is a lifetime pursuit. For most of us, saving for retirement, managing debt and controlling spending all need to happen at the same time.

If you still believe you don't need to be saving money in the 401(k) plan provided by your employer, it is very simple and easy to opt-out. No need to get frustrated. No need to pull out the Constitution... or call the police. Understand that your employer is doing this because they care. Be thankful that your savings process has begun and start getting excited about retirement. There's a whole new life to look forward to after work.

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