If you are nearing retirement, or want to make sure that you are financially prepared…
You’re starting a new job, so you should make sure that you’re aware of all the benefits that come with the position. So, this is a good time to start talking to your employer about your 401k investment choices. Most employers will give you the choice of self-directing your funds, but it’s always good to get some trusted financial advice before you make any major financial moves with your retirement account.
One of the first things you’ll need to do when you’re selecting a 401k investment is read over your summary plan description. This series of documents will outline company policies for you, and will let you know if there are any restrictions on where you can place your money, so that you’ll understand exactly how to invest your 401k funds. The administrator of your 401k account will have these documents for you, so contact your HR department as soon as possible.
You may also want to look into hiring an independent financial advisor when you’re making 401k investment choices. If you don’t hire your own advisor, it’s a good idea to open a brokerage account with a financial institution that manages employee investing. This way, you’ll have professionals on your side that will notify you of your account balance on a regular basis. Hiring an advisor or becoming a brokerage account holder will also help to provide you with practical information on how much to invest before retirement, and how to manage your money after you are making regular withdrawals.
Once you know more about your choices, you should make a list of your investment options. This list should be based on any restrictions you’ve received from your employer, and should remind you of the advantages that are offered by your brokerage company. If you want to direct your 401k investment monies outside of brokerage hedge funds, you should choose several different types of investments. This way, you’ll have the opportunity to partner your riskier investments, like stocks, with safer transactions like money market mutual funds.
If you’re not quite ready to retire, you can also use your 401k investment funds towards the purchase of your first home. This is only recommended if it is the absolute best way for you to finance your mortgage. Making this financial decision will allow you to gain another long-term investment in your home by trading your retirement funds off.
If you’re not quite sure what to do with your 401k monies, or if you just need more information on the investments that would be best for you and your family, you can visit your local financial institution, or log onto www.cnn.com for more details.