How Well Do You Know Your 401K?

The 401k has become the standard for employer retirement plans in the private sector. For many employers, this has become the only retirement benefit that they offer their employees. 

The Death Of Pension Plans

Many pension plans have been phased out and eliminated by employers because of the immense burden it places on the company. The disadvantage is that the employer is responsible for offering the defined benefit, or a guaranteed income once the employee retires. 

The Transformation Of The 401K

In the early 1980s, 401k plans were only available at a handful of large companies. Today most employers offer a 401k as a benefit to their employees.  

A Lack Of Retirement Training Or Guidance

Most 401k plans are invested in the stock market and most commonly invested in mutual funds. Employees are also seldom offered any reliable advice from a fiduciary in regards to investing in their 401k’s.  

Regretting The 401k Plan

Benna realized his invention actually made the rich richer and didn’t benefit the line-level employees. This is one of his biggest regrets. 

Stock Market Volatility

It is also essential to understand that market-based investments carry certain degrees of volatility depending upon your specific investments. This is simply knowing that the market will go up and down at any given time.  

Using A 401k To Your Advantage

Investing in a 401k can also carry some benefits if done correctly. One benefit is the employer match. For example, if your employer is offering up to a 3% match, take advantage of it – that’s free money! But educate yourself and choose investments that suit your needs and goals. 

Swipe up now to read the full post!