For the uninitiated, a 401k is a retirement savings plan that allows you to consistently save until the day you no longer have to work. Money is regularly taken out of your pay in order to support the plan in question, and it takes several years for it to truly build. You might have a 401k being built right now, but how do you know if you're getting the most out of it? To maximize it, here are 4 methods to consider, courtesy of Bob Jain.
According to authorities on finance like Robert Jain, you should contribute more to your 401k with every pay raise you receive. While you don't have to contribute your entire raise to each month's savings, the truth is that a little more can go a long way. This is especially true if you remember that a 401k has to be built over the course of several years. Don't let your raises go to waste; invest them wisely in this plan.
What if your employer is able to match your contribution? Believe it or not, many workplaces match what their employees put into their respective 401k plans, which means that those men and women earn more money toward said plans. This accumulation of "free money," for lack of a better term, ensures that these individuals retire sooner in life. If you feel like you're not receiving this benefit, ask your employer to learn more.
If you're in a tight financial situation, it might seem like a good idea to simply take money out of your 401k. Depending on who helped you establish this plan to begin with, you may already know that this is a bad idea. For those that don't know, not only will this set back the progress you've made with saving money but you may be penalized with a payment that you must cover. Simply put, taking money out of your 401k early isn't worth it.
Lastly, if you are truly focused on getting the most out of your 401k plan, make it a point to review your progress at the end of the year. This will give you the opportunity to evaluate the progress you've made, not to mention implement any changes that you see fit. These could relate to savings, meaning that you might increase or decrease them depending on your financial situation in general. Whatever your goals entail, a review session at the end of the year is recommended.
According to authorities on finance like Robert Jain, you should contribute more to your 401k with every pay raise you receive. While you don't have to contribute your entire raise to each month's savings, the truth is that a little more can go a long way. This is especially true if you remember that a 401k has to be built over the course of several years. Don't let your raises go to waste; invest them wisely in this plan.
What if your employer is able to match your contribution? Believe it or not, many workplaces match what their employees put into their respective 401k plans, which means that those men and women earn more money toward said plans. This accumulation of "free money," for lack of a better term, ensures that these individuals retire sooner in life. If you feel like you're not receiving this benefit, ask your employer to learn more.
If you're in a tight financial situation, it might seem like a good idea to simply take money out of your 401k. Depending on who helped you establish this plan to begin with, you may already know that this is a bad idea. For those that don't know, not only will this set back the progress you've made with saving money but you may be penalized with a payment that you must cover. Simply put, taking money out of your 401k early isn't worth it.
Lastly, if you are truly focused on getting the most out of your 401k plan, make it a point to review your progress at the end of the year. This will give you the opportunity to evaluate the progress you've made, not to mention implement any changes that you see fit. These could relate to savings, meaning that you might increase or decrease them depending on your financial situation in general. Whatever your goals entail, a review session at the end of the year is recommended.
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Get in touch with Bob Jain if you would like additional information regarding what you have just read.. This article, Bob Jain: 4 Tips For Getting The Most From Your 401K has free reprint rights.
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