These are common-sense 401k investing tips that will help you build your retirement savings. While not all 401k plans will work for everyone, these plans can be the most cost-effective and painless way to save money and invest for retirement. These investing tips will help you make more money and avoid costly errors in 2014, 2015, and long into the future.
A common 401k investment tip that is often overlooked is to view your retirement money and keep a reserve of cash in the bank for financial emergencies. If your employer offers a matching donation, take advantage of it. You get the money for nothing and you can keep it if it remains in your plan for long enough to be VESTED according your plan’s rules. What could be more rewarding than making money investing with no money at all?
Take advantage of any STABLE ACCOUNTs that pay interest in your plan. This is one of my top 401k investment tips in today’s low interest rate environment. These accounts are considered safe and often pay the highest interest rates anywhere.
You should seriously consider a ROTH-401k if it is available. If you comply with the rules, these plans are tax-free. It’s one of the few gifts that you’ll ever receive from the IRS. Traditional plans may allow you to get a tax write-off at the end the year. However, all the money you withdraw in retirement will be subjected to income tax. This applies to all the money that you have in the plan. A ROTH plan is different. ROTH plans are one of the few 401k investment tips that actually KEEPS money in your pockets.
You might consider investing in your employer’s stock. Consider one of my top investing tips: Don’t invest too heavily in it. You could lose your job if the company you work for goes under financial pressure.
These 401k investing tips will help you manage your money and asset allocation. The main goal should be to make money by investing at a level you are comfortable with. This could prove difficult in 2014, 2015, and beyond. A balanced portfolio should include at least one bond fund, one stock fund, and a safe fund such as a money market fund or stable account.
You can make more money investing in stocks and you will be more successful during good times. The stock market may be losing steam after five years of good performance. Reexamining your asset allocation is one of the best 401k investment tips for money management. It is possible that you have more stock and stock fund investments than you realize. Stocks have doubled in value over the past few years. This is a sign that you need to rebalance your portfolio and move some money from stocks.
You might feel more comfortable having half your money in stocks funds and the other half somewhere safer. You can make it happen by rebalancing your money and moving money to your safe and bond accounts. One-third of your new contributions should go to your safe account, bond fund, and stock fund. You want to invest over the long-term and avoid heavy losses.
These 401k investing tips will allow you to rest easy while your money grows. Make the most of your plan’s benefits. Next, review your progress and rebalance regularly. This is the key to making money in retirement investing.