We’ve all been there. It’s the first day of your new job, and someone hands you a stack of forms to fill out. You need to make all kinds of important insurance and benefit choices right now, so how in the world do you know which choices to make? Here we look at some of the most common benefit options and provide you with the background information you need to make immediate decisions regarding your employment benefits — and make changes to them down the road.

The Big Choice

The IRS allows you to contribute up to a set maximum, which changes from year to year, to your 401(k). Many experts agree that it is best to take out as much as you can afford right away instead of going back and trying to do it later once you are used to having the money. Try to sign up for the highest percentage contribution option you are allowed. You’ll be glad you did later.

Usually, you will have to decide which funds you want the money to be put into. Remember, you can go back and change this later if you decide on a different strategy. If you really do not understand mutual funds and the choices offered, check to see if there is a fund based on your life stage or age.

One example of this is target-date funds (also known as life-cycle funds). These are mutual funds that adjust risk as you age and require little on your part in terms of adjustments. If you are younger, you can handle more risk because over time the market will balance out in your favor. (To learn more, read Life-Cycle Funds: Can It Get Any Simpler? )

You will probably have the choice of money market funds. as well stock and bond mutual funds. If you don’t have a life stage mutual fund choice, remember a younger person would probably do well to be in a more stock-based fund as compared to a money market or bond mutual fund, which would be better for those nearing retirement. (Mutual funds can be a great vehicle for investing beginners. To learn more, read our Mutual Funds Tutorial .)

The Taxes

Many companies handle taking taxes out of your paycheck for you. They know how much to take out based on your filling out an IRS W-4 form. On this form, you will need to fill in your name, address, Social Security number and how many allowances you want to claim. You are considered one allowance. If you are married, then you can add another allowance; if you have kids they count as allowances, etc. The more allowances you put down, the less your employer will take out of your check. (To learn more about this process, see Payroll Deductions Pay Off .)

Health Insurance Choices

You may have to choose between a Health Maintenance Organization (HMO) and a Preferred Provider Option (PPO) for medical insurance. An HMO allows you to go to doctors that are contracted with a specific insurance company. If you have a specific doctor you really like to use, ask to see the list of doctors on that plan, or go to the HMO website to find a list of its providers. (For more insight, see How To Choose A Healthcare Plan .)

HMOs can cost less, but you may have to be flexible about which doctor you see. A PPO is not quite as strictly organized as an HMO. The doctors still have relationships with the insurance company, but you can see a doctor that may not be on the PPO’s list and still get partially-covered services. You may have to accept more out-of-pocket expenses to do so, but there are fewer restrictions.