A 401K is a great way to save for retirement. Investment wise you can look at the various funds that are afforded and look at the previous performance by month or year and what the market is like. Try to put money in areas that make sense to you. What are areas or places where growth is likely. A percentage in your company stock is usually wise too, but how much depends on yourself.

Screwed? I'm not sure what you mean?

Consider that most 401(k)'s will offer a company match. I've heard it as low as 50% match on the first X dollars. Still, if you work for 50 years at that company that first year "donation" ends up being a 1% boost to your rate of return!

So, get started is step one.

Contribute at LEAST to the level to get the maximum company match, if any.

Then diversify your money amoung as many funds as possible for greater safety.

Yes it is possible to get "screwed", but it is unlikely and so long as you read your statements regularly, you will be fine.

The only way for this to happen (and i know someone this happened to) is if your company works with an unscrupulous broker who allows the company to withdraw funds from the account.

But, while this does happen sometimes, it is highly illegal and the brokerage firm is responsible for replacing any funds it pays out without your written permission, so at worst its just a head ache.

As with any account, anywhere, read your monthly statements for inaccuracies and you will be fine.

I prefer an IRA. Choice of investments up to you. If your employer matches your 401K investment then I think you should stay with it. Yes, you can get screwed. I once had a 401k with an employee leasing company that went bad due to embezzlement by its owners. I got the money but only after the govt hired CPA firm deducted a huge chunk for auditing/management fees.