If you don't know what a 401k is, it's essentially a savings plan that is used to help someone prepare for retirement. As money is regularly taken out of one's pay, it is then pooled into a separate account that can be used once retirement is reached. You might know the importance of saving, but did you know that there are other ways to get the most out of your 401k? Here are 4 tips, offered by Bob Jain, to help you do so.
One of the ways to get the most out of your 401k plan is by increasing your savings with each pay raise received. This doesn't mean that the entirety of your raise has to be dedicated to the plan in question, but you can still contribute a few dollars more if you'd like. As a matter of fact, this is one of the best ways to reach the point of retirement earlier in life. Financial authorities such as Bob Jain would be hard-pressed to disagree.
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.
What if you find yourself in a position where you need money fast? Dipping into your 401k savings may be the worst thing that you can do, as it can severely impact your savings in the long-term. It also doesn't help that you are liable to be penalized, meaning that you might have to pay back more than what the money you take out is worth. An important rule to remember is to forget that you even have a 401k. It makes saving up for retirement that much easier.
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.
One of the ways to get the most out of your 401k plan is by increasing your savings with each pay raise received. This doesn't mean that the entirety of your raise has to be dedicated to the plan in question, but you can still contribute a few dollars more if you'd like. As a matter of fact, this is one of the best ways to reach the point of retirement earlier in life. Financial authorities such as Bob Jain would be hard-pressed to disagree.
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.
What if you find yourself in a position where you need money fast? Dipping into your 401k savings may be the worst thing that you can do, as it can severely impact your savings in the long-term. It also doesn't help that you are liable to be penalized, meaning that you might have to pay back more than what the money you take out is worth. An important rule to remember is to forget that you even have a 401k. It makes saving up for retirement that much easier.
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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Contact Bob Jain if you'd care for more advice about what you've just read.. This article, 4 Ways To Maximize Your 401K, With Bob Jain is released under a creative commons attribution license.
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