What is a 401K Plan?

A 401K plan allows you to save money on a pretax basis with most employers contributing matching funds to make the plan even more rewarding. Usually you will have the option to choose how much you contribute (up to the maximum allowed by the government) and where you will invest your contributions (from a list of funds provided by your employers plan).

401k plans are a exceptional way to prepare for your retirement. As with any other investment, you need to carefully watch your portfolio and make wise investment choices.

Making sense of your 401k plan & investment choices:

The hazard of making the wrong choices can dramatically impact where you end up when retirement arrives. If you start early but put all your money in the "safe" choices like bonds or cash because you don’t know what funds to choose… you could be very disappointed in the end result.

It's reasonable to assume that people's confusion about how to invest their money keeps them from participating or causes them just to stick their money in the cash account, neither of which is a good choice.

• Invest enough in your to at least get your full company match:
  There's no reason not to take advantage of your company's free money. Even if you're repaying debt or trying to achieve other goals, you need to save for retirement, and taking full advantage of a company's match is a good way to start.
• Don't invest too much in your company stock:
  It's not a good idea to have more than 10% of your portfolio in any single stock, and that includes your own company's shares.
• Consider getting a second opinion.
  Grage Financial Group will help assist you in making your 401k plan and investment choices at “No Charge”.
  • All we need is your last quarterly statement and for you to complete a simple retirement analysis.
  • This process is intended to help the average investor be more proactive in their retirement future.