Maximize Your 401(k) Match
It’s always a good idea to take advantage of free money. Company 401(k)s are designed to encourage saving and employers will often match the contribution up to a certain amount. That amount is usually based on a percentage of your salary – usually around 3 to 5 percent. For example, if your salary is $30,000 and you contribute 3 percent to your account, your employer will also contribute 3 percent, which is $900 of free money. Yahoo to free money!
Other Retirement Investment Opportunities
Once you maximize the opportunity for free money from your 401(k), consider other investment opportunities to diversify the tax structure of your retirement money. All the money in your 401(k) will be subject to taxes when you start taking out withdrawals, whereas the money put in a Roth IRA, for example, will be tax free income.
Minimize Your Risk Before Retirement
As you get closer to your time of retirement, re-asses. Most 401(k)s are market investments that expose your nest egg to the risk of loss. Some company plans have programs that help you to transition a percentage of your assets into safer investments at the appropriate time.
Bottom line: Take advantage of free money and seek the guidance of a financial professional to minimize risk and maximize opportunities.
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