You can make the most of your 401k account in the short time. If your employer offers a 401k benefit that can math your contributions, then you need to make the most of it by signing up today. There are no excuses for not using the savings plan because it’s one of the best strategies for retirement.
However, most people don’t have an employer that’s so generous during these times when there’s a bad economy. With the nation just getting out off a painful recession, a lot of people have been concerned about the financial health of their employers — what with layoffs and all. After all, bankruptcy did Enron in, costing a lot of people their retirement years.
Don’t forget that your 401k is your responsibility and nobody else’s to manage. There is an administrator that handles the paperwork and provides you with a menu of investment products to choose from, but ultimately, you are responsible for the money you decide to invest. If you make the wrong choices for your investments, you can end up with a poorly performing portfolio.
Learn to maximize your contributions. So your retirement accounts contain long term investments, but this doesn’t mean that you should take unnecessary risks and that you should be overly aggressive with your investment selections. Use the investment tools offered by online brokers and investing sites to check on your portfolio’s composition and how to best diversify your savings.
There are certain investments that may be more suitable for long term accounts and which work best with a 401k. Stock mutual funds and index funds are great choices — they are the perfect balance of risk and reward, in my opinion. It’s also interesting to note that many employers will offer their own stock as part of their company retirement program.
For many of us, leaving an employer also means leaving our 401k behind and forgetting about it. As in my own experience, performing a rollover is a task that often falls by the wayside. But this is something that shouldn’t wait: you should work on moving your money over to a high yield savings account using a rollover IRA registration.
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