Common Sense 401K Investing Tips
Here are some common sense 401k investing tips to help you build your retirement nest egg.
Not all 401k plans are created equal, but for most people these plans offer the best and least painful way to accumulate and make money investing for retirement.
With these investing tips at your fingertips you can both make money and avoid costly mistakes in 2014, 2015 and well into the future.
One of the often overlooked 401k investing tips: view your 401k money as retirement money only, and set aside a cash reserve in the bank for financial emergencies.
Then, if your employer offers a matching contribution take advantage of it.
It's free money and yours to keep IF it stays in the plan long enough to become VESTED according to your plan's rules.
What could be better than to make money investing with free money? If your plan has a STABLE ACCOUNT that pays interest, take advantage of it.
That's one of the best 401k investing tips I can think of in today's low-interest rate environment.
Not only are these accounts considered "safe", but they often pay one of the highest interest rates available anywhere.
If a ROTH 401k is available to you give it serious consideration.
These plans are TAX FREE if you follow the rules, and tax free is one of the only gifts you'll ever get from the IRS.
In traditional plans you might get a tax write off at the end of the year, but all of the money you pull out in retirement will be subject to income tax.
This includes the money you make in the plan.
Not so with a ROTH plan.
Consider ROTH plans as one of the few 401k investing tips that KEEPS money in your pocket.
Your employer's stock may be one of your investment options.
One of the investing tips I suggest you consider: don't invest heavily in it.
If the company you work for gets into financial trouble you could lose money in their stock, as well as losing your job.
The remaining 401k investing tips are related to asset allocation and money management in your 401k.
Your main objective should be to make money investing at a level of risk you can be comfortable with.
In 2014, 2015 and going forward this could be a challenge.
You'll want to maintain a balanced portfolio consisting of at least one stock fund, a bond fund and a safe fund like a stable account or money market fund.
The more you allocate to stocks the better your chances to make money investing and to prosper in good times.
But after five good years in a row, the stock market could be running out of steam in 2014 or 2015.
One of the top 401k investing tips for 401k money management: review your asset allocation at least once a year.
You may find that you have more invested in stocks and stock funds than you think because stocks have more than doubled in value in the years leading up to 2014.
If this is the case rebalance your portfolio by moving some money out of stocks.
For example, you may feel comfortable with half of your money in stock funds and half someplace safer.
Make it so, by rebalancing and moving money to your safe account, and maybe to your bond fund.
Have one-third of your new contributions going to your stock fund, bond fund and safe account, equally.
You want to make money investing over the long term while avoiding heavy losses.
With these 401k investing tips you should be able to relax while your money grows.
Take advantage of the benefits your plan offers.
Then, make sure to review your progress and rebalance periodically.
That's the key if you want to make money investing for retirement on a consistent basis.
Not all 401k plans are created equal, but for most people these plans offer the best and least painful way to accumulate and make money investing for retirement.
With these investing tips at your fingertips you can both make money and avoid costly mistakes in 2014, 2015 and well into the future.
One of the often overlooked 401k investing tips: view your 401k money as retirement money only, and set aside a cash reserve in the bank for financial emergencies.
Then, if your employer offers a matching contribution take advantage of it.
It's free money and yours to keep IF it stays in the plan long enough to become VESTED according to your plan's rules.
What could be better than to make money investing with free money? If your plan has a STABLE ACCOUNT that pays interest, take advantage of it.
That's one of the best 401k investing tips I can think of in today's low-interest rate environment.
Not only are these accounts considered "safe", but they often pay one of the highest interest rates available anywhere.
If a ROTH 401k is available to you give it serious consideration.
These plans are TAX FREE if you follow the rules, and tax free is one of the only gifts you'll ever get from the IRS.
In traditional plans you might get a tax write off at the end of the year, but all of the money you pull out in retirement will be subject to income tax.
This includes the money you make in the plan.
Not so with a ROTH plan.
Consider ROTH plans as one of the few 401k investing tips that KEEPS money in your pocket.
Your employer's stock may be one of your investment options.
One of the investing tips I suggest you consider: don't invest heavily in it.
If the company you work for gets into financial trouble you could lose money in their stock, as well as losing your job.
The remaining 401k investing tips are related to asset allocation and money management in your 401k.
Your main objective should be to make money investing at a level of risk you can be comfortable with.
In 2014, 2015 and going forward this could be a challenge.
You'll want to maintain a balanced portfolio consisting of at least one stock fund, a bond fund and a safe fund like a stable account or money market fund.
The more you allocate to stocks the better your chances to make money investing and to prosper in good times.
But after five good years in a row, the stock market could be running out of steam in 2014 or 2015.
One of the top 401k investing tips for 401k money management: review your asset allocation at least once a year.
You may find that you have more invested in stocks and stock funds than you think because stocks have more than doubled in value in the years leading up to 2014.
If this is the case rebalance your portfolio by moving some money out of stocks.
For example, you may feel comfortable with half of your money in stock funds and half someplace safer.
Make it so, by rebalancing and moving money to your safe account, and maybe to your bond fund.
Have one-third of your new contributions going to your stock fund, bond fund and safe account, equally.
You want to make money investing over the long term while avoiding heavy losses.
With these 401k investing tips you should be able to relax while your money grows.
Take advantage of the benefits your plan offers.
Then, make sure to review your progress and rebalance periodically.
That's the key if you want to make money investing for retirement on a consistent basis.
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