What Makes A Good 401K Plan?
How to look for a great 401k plan from your employer and what to do if the employers plan is not the best on the market
401k plans are not all designed the same way. Each plan offers different investment strategies, maintenance costs and accessibility by the holder. When you are looking for a great plan for yourself, there are a few things you should look for to ensure you have a satisfying plan.
*Review maintenance costs. Higher costs do not necessarily mean better return on your investments.
* Check if there are options available to get a loan or a hardship withdrawal against the plan in the future.
* Make sure there is a sufficient number of investment options and that the account can be accessed at your convenience to make changes
* Look to see how much employer will contribute and how long the vesting period will be before the money is yours.
* Check eligibility requirements and if there are restrictions on tha amount you can invest yearly.
My 401k Plan Does Not Offer All Of These Options, Should I Invest Anyways?
If your employer matches any of your contributions into their 401k plan you should invest in it regardless. This is an opportunity to save money for your retirement with the additional funds provided by your employer. Even when employer plans are not great, they are still a retirement savings option. Remember, just because you have a 401k plan does not mean you cannot make further retirement plans on your own.
My 401k Plan Is Perfect Should I Only Invest In This For Retirement
If you have a well performing 401k plan you should take advantage of it and maximize your yearly contributions. The best way to have a great retirement is to prepare for it now. Even when your 401k is performing at incredible rates do not fail to invest other money elsewhere. Take advantage of IRA’s, investment accounts and other forms of investments with your extra money. The stock market can be finicky and having all of your retirement resting on one plan may leave you in a bind in the future.
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