Some Advice on Your 401K Plan
Use Tax Advantages and Time to Maximize Your 401K Plan Assets
401K plans can be confusing and sometimes difficult to understand. In addition, each company's 401k plan is slightly different and requires different plan advice. With that said, we've outlined some simple 401k plan advice that should apply to most people.
401K Plan Advice
- Always contribute the maximum amount of money to your 401k plan. If you absolutely can't afford to contribute the max, make sure that you contribute any amount that your company matches.
- Keep your 401k account and don't get the urge to make an early witthdrawal.
- A great way to feel good about your commitment to your 401k is to understand how the compounding effect of money will vastly increase your account over the years.
- When you get closer to withdrawing money from your 401k account, you should brush up on the 401k withdrawal rules,, so you understand how it will impact your taxes in the future.
- Learn and apply all of the other financial and investing rules covered on our site, including the basic financial concepts. Take the right amount of risk and stay diversified (don't invest only in your company's stock).
- If you leave your company, roll your account over to a special rollover account with the broker of your choice (including online discount brokers) and keep all of the tax free advantages of your 401k.
- It's also important to view your 401k account as part of your total retirement portfolio. When planning for retirement make sure you include the impacts of all of your other income sources and investment accounts. Study the tax implications of how to set up your accounts for beneficial estate laws and taxes.
See Also: Other 401k articles