401(k)rash Course

Maybe you have no idea what a 401(k) is and why it’s important or maybe you want a little easy refresher breakdown.  Bottom line, planning for your future is the most important thing you can do in the present, so whatever you do, enroll.  Turn all your 401(k) questions into 401 K, I can do this! with this easy rundown.

Start Young

Even if it means starting small.  Maybe you can only contribute the bare minimum, and that’s okay, just do it.  You don’t want to mentality of, “Oh, I’ll worry about that later.”  There are many ways to make your budget work with your 401(k) in mind.  When thinking about your budget, housing, food, transportation, always work in your 401(k) deduction from your paycheck, you’ll have a clearer idea of what you are able to contribute.

Game, Set, Match!

Take advantage of your company matching any contributions.  Find out what percentage they match and contribute at least that amount – it’s free money going straight to you!  Make the most of your investment by making the company work hard for you.  It’s a great employee bonus that many people don’t take advantage of.

So Much Diversity

One of the fun parts about your 401(k) is having the ability to diversify your investments.  You get to choose how to invest, be it high risk, or low risk.  If you are unsure and want to take out the guesswork, stick to the middle of the road option that will be a safe bet.  The company managing your retirement fund will invest in multiple stocks and options to give you the best portfolio that will work hard for you.  Even if you have no idea what to invest where, it’s more important to just be enrolled and involved – let the experts take care of it for you.

Hold Steady

Do not cash out your 401(k) when you leave a job, wait for retirement.  You pay taxes when you cash out your fund and it’s better to save it for the long haul.  Some places charge you penalty fees for early withdrawal and that’s just losing money.  You can roll your 401(k) from a previous job into a new one, or manage them all in one place.  Bonus – it’s really nice when you remember you have that separate account with money stashed away.

Hopefully this easy guide can be the beginning stepping stones to unlocking your future.  There is a lot of information out there to help you on the rest of your journey, but the most important piece is to take control now.