Your 401K And Other Mysteries:
Make The Most Of Your Retirement Fund
Contributed by Elaine Landau
How much time do you spend thinking about your 401K plan? If you are like a lot of people, the only time you think about it is when somebody from the plan itself comes to speak to your company. They show you pie charts and talk about aggressive versus conservative investing. They also talk about your best options, depending on your age and income. Eventually it becomes a bit of a blur, but it is really important to plan for your future, so you stay and take notes so you can discuss your options with your spouse.
That evening, at home, you figure out what parts of that pie you want to put your 401K money into. Chances are you want to be a little conservative, a little aggressive; whatever combination will reap the largest rewards when you finally hang up your hat and retire. You sign the forms, hand them in, and then, like so many of us, you forget about it. You figure the money is out there making money so you’ll have a nice nest egg when you need it.
Does your nest egg have a few cracks?
When was the last time you went online to check your 401K account? Do you know that you can check the status of your funds online? You don’t have to wait for a statement in the mail. If you are not Internet savvy, that’s an easy hurdle to get over. Basic Internet training is available so you can learn at home. After your first free Internet lesson, you’ll be hooked. With free Internet tutorials, you will become so comfortable with your keyboard, you may never open another statement again.
The information about your 401K should be password protected so nobody else can view your information. With frequent reviews, you will be able to determine if you are maximizing your 401K returns, if your plan is working efficiently, and if you need to make some changes.
But what’s wrong with what you have?
Maybe nothing, maybe everything. Your 401K plan may be working fine, but wouldn’t it be nice to implement a strategy that could make more money? A two-prong approach was recently published that actually claimed to raise your return by 8% resulting in 4 times what you initially expected when you retired. Okay, that may sound like a big word problem, however, some of the suggestions for possibly increasing your 401K plan return were worth noting.
- Keep in mind that compounding interest is a good thing.
- Track your 401K on a daily or weekly basis. No more letting it do its own thing. By watching your holdings often, you will be able to spot a portfolio decline and switch into a money market or another position before that decline can cause real damage.
- Don’t let your portfolio decline more than 5-10%.
The idea is to increase your return. By spotting a decline and responding by moving your funds to a more optimal position, you can safeguard your investment and hopefully reduce your losses.
For a more detailed discussion, log onto wealthscientist.com.
It is astounding how much information you can find on this subject online. According to the experts, it doesn’t matter how the administrator sets up your 401K. You can make changes.
Some online articles include discussions about index funds and such. Some offer in-depth examples of conservative strategies and aggressive positions. Educate yourself. Realize that it is your money. Nobody else is going to care more about the performance of your 401K plan than you.
About the Author:
Elaine Landau is a freelance writer, publicist, web site editor, and television writer with more than 15 years of experience in marketing, advertising, and publicity.
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