Money & Investing - Banks.com

Many people do not really think about their retirement plans as investments. However, your 401k is an investment — usually an investment made up of several investments. In order to make the most of it, you need to do what you can now to ensure that your future is properly funded.

Over at Stock Trading To Go, there is a great article that includes 5 ways to give your 401k a boost. Here is what the article suggests:

1. Set aside what you can. Carefully evaluate your budget and see what you can set aside for your 401k. Every little bit helps. If you have to start out small, start out small.
2. Take advantage of the company match. Most companies offer a matching program. Find out what that program is, and take advantage of it. A matching program is free money that goes into your retirement account from your employer.
3. Diversify. It’s your 401k, so you can choose, for the most part, the investments that are in there. Evaluate your retirement plan for diversity, and make sure you inject some if it is needed. This includes company stock. Do not tie your entire fortune to company stock. At most, many analysts recommend, you should only have 10% of your 401k in company stock.
4. Know your 401k plan. Make sure you find out as much as you can about the retirement plan offered by your company. Research the investment company, and talk to human resources. You should be educated about your options — and the fees and other details of your retirement plan.
5. Don’t raid your retirement plan. It is very important that you avoid raiding your retirement plan. Keep the money in there until you retire. Even if you can start taking distributions (because you are 59 1/2), resist the temptation until you do, in fact, retire. There are hefty penalties if you withdraw money from your 401k early.

I would also add this: Check into a Roth 401k. This is a relatively new item available (only a couple of years or so), but it is a great option. It has the same tax benefits as the Roth IRA, but without the income and contribution restrictions.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock trading, 401k, investing blog, retirement plan,
retirement accounts, investments, Roth 401k