For Our Info

Do you have a 401k plan? If not, does your employer sponsor this type of program? If so, you should enroll and immediately. Why the rush? Continue reading on to find out.

If you weren’t aware, a 401k is an employer sponsored retirement savings program. Over time, you contribute money. Your money is invested. You can choose from a wide range of investments, including money market funds, stock funds, bond funds, or a collection of all three. This money is accessible before retirement with an early cash out or loan. As nice as it sounds to dip into this money, there are consequences, such as repayment, tax penalties, and fees. For that reason, those who contribute to a 401k plan are encouraged to leave their investments as is and collect at the age of 60.

As nice as it is to know what a 401k plan is, you may wonder again about the rush. Why is now the best time to get started? For starters, there are employer contributions. Most employer sponsored 401k programs have a matching program. This means that the employer contributes to the retirement savings plan too. Depending on your company’s preference, the contribution amount will vary depending on position, hours worked, and time with the company. Your match can be as small as 25% or more than 100%.

As for why employer contributions should cause you to rush, consider it free money. By adding a few dollars to your retirement account, your employer contributes too. This is free money. Even if you start out investing only $250 a month, that money will grow overtime with employer contributions. Consider it free money. If invested in the right places, it is not only free money, but money you can profit from.

Another reason for the rush is the current state of the economy. It is in bad shape and the stock market is suffering too. Stocks are nearing all-time lows. Turn on the news and you are likely to hear a report about retirees losing money. If this economy caused current and soon-to-be retirees to lose money, why do you want to invest now? Because of low-cost stock. Since stocks are at lows, you can buy them for cheap. The good news is that the economy is expected to turn around. Those low stock prices will eventually rise. This is where you able to make a profit.

If you don’t have a 401k plan, it is important to do more than just buy stock. It may continue to get worse before the economy improves. Not all companies will survive the wait. Research all companies and stock history before investing. Look at the long-term history. A stock that took a dip in 2007 and 2008, but was steady before, is just a victim of the economy. When it improves, so will shares. Be cautious of stocks with long-term lows. If stock shares remained consistent for 5 years, do not expect much change, even as the economy improves.

Finally, it is important to diversify. Not only diversify your stocks, but your investments as a whole. Opt for a collection of stocks and bonds. If you make a profit with the stock market, when the economy improves, get out when the getting is good, especially if you intend to retire in 5 or 10 years. Take the money you made and switch over to low-risk investments, like money markets and bonds. If you are concerned with risk, wait until you get some profit and then make the switch. However, don’t get caught in the never ending cycle of good and bad economies.

Delicious Digg This Post Ping This Post Reddit

• How to Enroll in a 401k Program If you are getting your first job or if you are now starting the journey to save for retirement, a 401k plan is a great place to start. A 401k plan is a retirement savings program. They are employer sponsored. For that reason, you need to work for a company......
• Frequency of Dog Breeding When is the best time to breed a bitch? Studies reveal that in order to ensure the health of the mother dog and her puppies, breeding should only take place one the bitch is two years old. After that, breeding can be repeated in alternate years. Just like humans, female......
• Work from Home? Top Items You Need to Make your Job Easier Home based businesses are on the rise throughout the nation. In order to work at home efficiently, there area few key items you will need to be successful. Review this checklist of the top items you will need to make your job easier. First, it is important to have a......
• Moms in Affiliate Marketing Affiliate marketing is becoming popular with moms as a way to make a nice income every month without doing as much work as they would with other work at home jobs. Before you try affiliate marketing, you need to understand what affiliate marketing is and how it is done. There......
• Building a Domain Sales Website When it comes to making money with domain names, flipping is often the first to come to mind.  Domain name flipping is a great way to make money online.  It describes the buying and reselling of domain names.  Unfortunately, not everyone is able to profit from this practice.  These individuals......

• What to do with My 401k in the Current Market or How I gave my 401k Some TLC! It's not surprising that there are many people who are wondering: What should I do with my 401k in this market? One day the DOW (DJIA) is up 200 points, the nest it may be down 300. More often than not, a good day is a mixed market - maybe......
• Why Invest? Do you have some money socked away, or are you planning to sock some money away for the purpose of investing? Are you wondering why investing would be a smart idea and how you can best benefit from the act of investing? Simply put, you are going to want to......
• President-Elect Obama Roundup Another edition of the RCDL roundup. Congrats to President-Elect Obama for winning the election! Frugal | Money Saving Tips: The Christian Science Monitor takes a look at when gift-card promises go unfulfilled. Good points for holiday shoppers. Financial Ramblings writes this winter tip: The Most Beautiful Way To Save Money......
• Tax Week: Final Thoughts and Opinions There are two things that I hate when it comes to business and decision making: wasted resources and needless complication.  Take wedding planning for instance.  The Sheconomist is a stickler for details and has spent hours figuring out which photographer would be best for our wedding.  I'd rather simply pick......
• 4 Tips to Improve Your Finances The more steps that you take to improve the finances, the better off you will be in the long run. With consumer debt levels reaching an all time high and personal rates of saving reaching an all time low, personal finance is beginning to more closely resemble rocket science. Here......