401(k) Basics (Even Though You're Not Old)
You finally get a job and are ready to start your career. Thoughts of retirement are likely far from your minds, however now is the time to start planning for your future. Figuring out your 401(k), investments, savings and understanding financial jargon can be overwhelming and stressful, however we need to learn and begin to understand how our decisions now will impact the future. Here are five tips to get you started:
1. Take the FREE Money. Your minimum 401(k) investments should at least be the amount your employer matches. Company matched funds are an opportunity to earn free money, if you don’t invest the total amount you are essentially throwing money away.
2. Invest wisely. Do research or seek a professional when determining where and how to allocate your investment funds. Don’t pick randomly but try to find funds that will work for you and begin to build your portfolio. Also, mix your assets.
3. Leave it Alone. Do not use your retirement account as a checking account, it is not there for daily use. Early withdrawals can negatively impact your current financial situation, due to additional taxes you’ll owe and penalties, and future investments.
4. Keep track. Follow your investments and see how well they are doing. Read the reports sent to you and decide if you want to change your investments or invest more aggressively. Don’t be a lay person, actively participate in shaping your financial future.
5. Research. I’m not a financial expert and chances are neither are you, and that’s okay. But know that this brief article is not the end. You need to find the best retirement and investment plan that works for YOU. Read articles, talk to advisors and meet with your HR department.