Time to make a list of resolutions for 2003 and the possibilities are almost infinite. Alone with joining a health club to get in better shape, consider including a few that will get your 401(k) plan in better shape.
Here are five resolutions you might want to add to your list this year:
Start saving now: If you haven’t joined your employers 401(k) plan, don't put off participating any longer. Time is your best guarantee that you will make your retirement goals. So the sooner you start contributing to a 401(k) the better off you are going to be in retirement. Even just one or two percent will make a big difference.
Contribute as much as you can: You can contribute up to $12,000 in 2003. If you can afford to, put in the maximum, but whatever you do, contribute as much as you can. It may seem obvious, but the more you contribute, the more you are likely to have at retirement. If your employer matches your contributions, contribute enough to get the full match. This is free money that you can't afford to pass up.
Diversify your portfolio: A well diversified portfolio is your best assurance that you are going to have a nest egg at retirement. Don't be too conservative, but don’t become greedy and take unnecessary risk. Spread your assets among funds of different asset classes and investment styles. Watch out for an over concentration in your own company's stock -- keep company stock to 10% or less of your own contributions.
Invest for Growth: Unless you are within five years or so of retirement, equity mutual funds (stocks) need to be an important part of your allocation. Don't worry about short-term ups and downs in the stock market. Over time, stocks have usually outperformed all other types of investments while staying ahead of inflation. Make equity mutual funds the core of a long-term investing strategy.
Educate yourself: You are the only person who has your own vested interest fully at heart, so it is up to you to ensure you know what your plan is all about and how to take full advantage of it. The only way to do this is to educate yourself. Go to all educational opportunities that your employer offers. Get a copy of the 401(k) plans Summary Plan Description and read it. It contains lots of good information on how your plan works, what options are available, who the trustees are, and other important information. Surf the web and find a couple of good sites on 401k plans like www.401khelpcenter.com. Understand your investment options. Ask questions.
About 401khelpcenter.com, LLC
401kHelpCenter.Com, LLC, based in Portland, Oregon, is a leading provider of information, opinion, analysis, trends, news, regulatory changes, and other resources on 401k. Founded in 1999, its objective is to provide an easy and effortless way for plan sponsors, human resource personnel, retirement professionals, small business owners, and plan participants to obtain unbiased information specific to 401k plans. Named "Best of the Web 2002" by Human Resource Executive magazine.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
