First, they usually match up to a certain percentage, usually around 6% so this is the minimum amount that you want to chose since once you are fully invested, you will have an automatic 35% return on your money. If you leave the company, than you can roll your 401(k) into your new employer's plan, into a roll over IRA, or leave it where it is. Finally, yes you can take loans or withdrawal money from your 401(k) prior to retirement. If you take a loan out and do not repay it, than that money is taxable at your current level and you may have a 10% penalty. If you just withdrawal money out of it, or cash it in when changing jobs than you will owe taxes and 10% penalty for early withdrawal unless it is for a qualifing expense such as college or a new home.

I think you'll find there are limits on how much you can invest -- talk with the HR person who knows. Put in as much as you can without tinkering with the amount every month. When you leave the company, you can "roll over" (transfer) the funds into another 401k or an IRA. These funds are intended to be used when you retire. To withdraw funds before that time will result in paying taxes at a higher rate than if you were retired, and possibly penalties. You can, however, borrow from your fund but have a specified amount of time in which to pay it back.

401k's, no matter how little your employer matches, are terrific investment vehicles because your contribution to the fund is deducted from the amount on which you pay income tax. Again, have your HR person explain it all -- and if s/he can't, they should have the plan administrator do a presentation to everyone in your company who hasn't seen it yet.

Americans are notoriously poor at saving so anything you can do early in life to create this habit is very good and will make for a higher standard of living when you retire.

1) depends on how much disposable income you have, but in general you should max out the employer match if you can (pay off credit cards first) because that's free money -- think of it this way, you are earning an instant 35% return on every contribution. There's no other investment that will pay you such a high rate!

2) depends on how the plan is designed -- some plans are "vested" right away meaning it's yours and you can take it when you leave (have it rolled over to a 401K elsewhere)

3) if you are under 59 ½ you will pay a minimum of 20% withholding tax mandated by the IRS, and a 10% withdrawal penalty. There are some penalty free withdrawal exceptions such as if you were to become disabled.

The person at your work who coordinates the plan should be able to give you more specific info.

Ask your employer for a Summary Plan Description (SPD). This will explain in plain English every thing that you just asked. In addition, your employer should have some educational materials to give you that will explain it with examples.

1. what can you afford? Is this money coming out pretax? How much will they allow you to put in pretax? How much of your contributions will they match? 6%-10% is good to start with. If they will let you put more in pretax then if you can afford it, max out the pretax contribution if they are going to match it all. (the company I work for will match all pretax contributions and I am allowed to contribute up to 25% pretax, then if I wanted, I could contribute more after tax but they won't match that)

2. if you leave, then you will get all of the money that you contributed but it will depend on what your company's vesting rules are to see how much you get of what they contributed. You may have to be with them 5 years or 10 years before you are 100% vested. Check to see what the breakdown is on vesting and how much of their contribution you would take with you when you leave. If the money is pretax unless you put it in another pretax 401K you will have to pay the taxes plus a penalty for early withdrawal.

3. Most 401Ks require you to be 591/2 before you can withdraw without a penalty. Some will let you *borrow* 10K without a penalty to put as a downpayment on a new home for a first time home buyer (I don't recommend this if you can avoid it). You will have to read the rules for the particulars on your 401K

Go to investodia.com, Yahoo Finance or money.aol.com and read about 401(k) plans. Your questions cannot be fully answered in this column.

I note the others have answered everything well, except how much you should be investing. Financial advisers recommend that you invest a percentage of your income equal to 1/2 you age when you start.

As you are 25, you should invest 12.5% of your salary, including what your employers will pay and keep that up for all your working life.