Keeping Up with Your Retirement Funds
If you are one of millions of investors who watched large portions of their retirement funds shrink in the past 5 years, you are more likely to ask …”What can I do NOW to stabilize and recover my 401k retirement plan”.
Of course answers are going to vary depending on how far you are from retirement. If you are 40, you have time to recover and can be more patient. On the other hand, if you are within 5 or ten years of retirement, you may need to be more aggressive. Ironically, this is quite the opposite point of view prior to 2008, when those close to retirement were told to "be conservative" and younger investors were encouraged to be more aggressive.
It hasn't been pretty, but we lived through it!
Sure, there are plenty of “experts” willing to give you advice on where you should put your money [3]. There always has been. Remember, before the economic collapse of 2008? Some experts were more than happy to encourage you into putting your money in sub-prime mortgages or real estate. The stock market seemed bullish and all was well. Then it all changed.
But yet it hasn't. It is still your money (what's left of it) and experts are still willing to tell you what to do with it.
5 Things to Consider in Rebuilding Your 401K Retirement Account!
1. Take full advantage of an employer’s matching contribution to your 501-K. This is easy. In simple terms, if you put in 50 cents to your 401k pension plan and your employer matches 50 cents, that is an immediate 100% return on investment. That is hard to beat in any market. Sure you want to know where these 401k contributions are being invested, but generally, take FULL advantage of any such opportunities you employer may have.
2. Times are tough but DO NOT Borrow From your 401K retirement plan. There are few good reasons to borrow from your 401k. It will take you years to recover. Unless you are literally losing your home, or are having severe medical issues, DO NOT borrow from your 401-K.
3. Check the “Administrative Fees” on your 401K retirement savings plan. While losses have mounted, in many cases “Administration Fees” have remained the same. Contact your 401K manager and ask for details. Do not be afraid to ask for a reduction in fees.
4. Diversify. Now is the time to really look at where your 401K funds are invested. Stocks generally hold up during inflation, and if you are close to retirement you may have to be more aggressive to rebuild your 401k. If you are 50 years old or younger, you still have time to be conservative.
5. Take control. In good times we may have felt we could let others manage our money with little or no supervision. That certainly is no longer the case. Come to terms with the fact that it is in your best interest to learn, and do more with your 401k [4].
Take control NOW... Plan accordingly with our 5 Tips for Retirement Planning [5]
Have you had any road blocks investing in your 401 k pension plan? Please comment below!