Financial Planning, Retirement Plan, 401k, Investment Blog

Financial Planning, Retirement Plan, 401k, Investment Blog

Posts Tagged ‘401k’

Do I Still Need a 401k?

Posted February 13, 2011 by Bernz

After hearing about the severe financial hit many people have taken with the recent financial turn, and with stories of people losing all their investment in their 401k many people wonder if a 401k is still a sound financial instrument.  From the start let’s point out what a 401k is, an investment strategy designed to help you supplement your income during retirement.  A 401k is not guaranteed, just as stocks are not guaranteed, but this in and of itself does not mean that a 401k is really a risky place to invest your money.

The presumed tax benefits of a 401k are one of the major reasons why people continue to invest at least part of their money in a qualified retirement account.  The amount that you divert into the 401k is not taxed, and over the course of the 30 years or so that a 401k is designed to hold your money you can accrue a relatively large savings on your income tax.

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Posted in 401k, Investing Strategies, Retirement Planning | No Comments »

Borrowing from your 401k Plan – Is it always the wrong thing to do?

Posted April 7, 2009 by Bernz

When times are tight, sometimes we need to dip into our savings to make ends meet. If the money you are bringing in from your paycheck is not enough to pay your bills or the interest you pay on credit cards or other debts gets too high you will have to get the money from somewhere. Or even personal reasons such as health and family issues.

Over the last few years, many people have used all of the equity in their homes by taking out home equity loans and now because of falling home prices they often owe more than their homes are worth. This has led consumers to look for other sources of cash to pay their growing debt and one of these sources is borrowing from their 401(k) plan.

I remember about 9 years ago when I had to borrow money from my 401K plan and use that money for down payment of a home. The original term of the loan was 15 years though I was able to repay that loan in a little less than 5 years time. It really was not a bad decision after all as my home have already doubled in value since. It was a decision that I had to make at that time for family reason.

More information on 401K plan and why you do not have to do what I’ve done………….. (more…)

Posted in 401k, IRA, Retirement Planning | 1 Comment »

Retirement: Do You Plan on Working After Age 65?

Posted March 23, 2009 by Bernz

A generation ago, it was taken for granted that people would work hard at their jobs until their 65th birthday, then retire to a life of leisure. Most companies provided their long-term employees with retirement plans that made their post-work years comfortable.

Today, however, workers are navigating a whole new employment landscape. Jobs are more transient than they once were. Workers are changing jobs and employers more often. Retirement packages are not a given any more and employees are lucky to find one that provides fully for the retired life. (more…)

Posted in 401k, Career, Estate Planning, Financial Goals, IRA, Retirement Planning, Roth IRA, Saving Money, Simple IRA, Traditional IRA | 1 Comment »

Cleaning Up Your 401(k)

Posted February 25, 2009 by Bernz

If you are like most employees who have a company-sponsored 401(k) plan, you filled out all the paperwork when you first signed up, chose your investment funds from the list provided, and proceeded to forget it from then on. In the last 12 months, it is likely that every time you take a peek at your plan, it has gone down in value yet again. Best to just not look at it and hope for a miracle, right? Wrong!

While there is not much that you can do about the global recession or the sorry state of the stock market, you can take charge of your retirement funds, especially your 401(k). Every 401(k) has an option to buy and sell the underlying investment funds every so often. You may be able to make changes to your plan every three months or even every day. Find out when you will be able to change out your investments and then take some time to know what’s going on with your existing choices.

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Posted in 401k, Index Funds, IRA, Retirement Planning, Roth IRA, Simple IRA, Traditional IRA | No Comments »

Making the Right 401(k) Choices

Posted February 3, 2009 by Bernz

Knowing which investment choices are right for you in your 401(k) plan has never been easy, but in the current economic environment, it can be downright torturous. Most funds that are available to choose from in your plan are declining in value and producing negative returns. This is also the case of the stock market as a whole. That means that your job is to select investment funds not to make the biggest return but to lose the least amount of money. Preservation of capital is tantamount during this extended recession.

Many investors make the unfortunate choice of trying to beat the stock market. However, it has been proven time and time again that, over time, managed funds rarely outperform the stock market as a whole, regardless of how talented and well-compensated the fund manager is. If seasoned experts cannot beat the market, it is highly unlikely that you will be able to. The best many investors can do is to match the performance of the stock market.  How can you choose investments in your 401(k) that will follow the stock market and preserve your retirement funds? Index funds.

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Posted in 401k, Financial Education, Financial Goals, Investing Strategies, IRA, Tax Reduction | No Comments »