401k
The responsibility for maximizing the value of your 401k falls largely on your shoulders. Here are ways that may help :
- Participate in the program – If your employer offers a 401k plan, definitely participate! The sooner you start contributing to the plan, the longer the span of time your money has to grow. Think about it: if you don’t put anything in it, you can’t get anything out of it!
- Take the company match – If you are asking yourself, “How much should I contribute to the plan?” Contribute as much as you can afford to, but no less than the amount required to receive the full company match.
- Plan your portfolio – Properly planning your asset allocation is key to the majority of investment returns.
- Diversify your assets – Spreading your assets among a variety of investments reduces risk. You may have heard about the old saying, “Don’t put all your eggs in the same basket!”
- Avoid loans – Put your money in the plan and let it go! This is your long-term savings, and your future depends on its success, borrowing money will just hinder the progress.
- Take it with you when changing jobs – Don’t cash out your 401k every time you change jobs. Even if the balance is too low, think about rolling it to an IRA and letting it grow.