Posts Tagged ‘401k retirement rollover’

401k retirement planning is simply a must

Now is the time to plan and review your needs to ensure your portfolio is properly positioned.

Many people are just getting up the nerve to look at their 401ks or other retirement plans, in light of the recent economic rebound. Hopefully, you didn’t pull your money out when the market was at its bottom, rather you were buying more or had already positioned your portfolio with more bonds if you were near retirement – and the recession didn’t affect you as much as others more heavily weighted in stocks.

With the market nearing 10,000 again, the possibility of a double dip recession is not out of question – in fact, many are arguing it’s inevitable. Thankfully, many of the big dogs of the investment world, like Warren  Buffett are brushing it off.

This brings up a good point though – as now is a better time to to reposition yourself if need be. Have you looked at your 401k retirement plan or other plans such as your IRAs lately? Have you reviewed your retirement goals and checked again that your retirement plans are on track? If you started your 401k retirement plan as soon as you were able and took advantage of it’s benefits then it can be a very substantial nest egg’ for you when it comes time to stop earning a regular salary. The timing of your retirement and the economic background performance, particularly of the stock market, will be influential on your retirement plans. But this just makes it all the more important to regularly review your potential money status at retirement.

Too many Americans live day to day, paycheck to paycheck, and put off starting 401k contributions. Too many Americans change jobs, cash out their retirement plans (sometimes forced to when laid off) and take years before restarting 401k contributions with a new employer.

Stock markets, despite being subject to boom and bust, have appreciated considerably over the long term. So again the benefits of starting contributions to a 401k retirement plan as soon as possible and continuously keeping up with them are plain for all to see. But at the same time, it’s not enough to just dump money in and forget about it. As you age, your investments should be changing.

If you are not in a position to contribute to a 401k then a traditional or Roth IRA will allow you to sock away even a few hundred a year, until you are in a better position to put money away every paycheck. Keep in mind, with an IRA, you do not have an employer matching your savings contributions and it is all the more important that you work on your retirement plan and update it annually or with each significant life change.  The very least you should do in terms of retirement planning is to understand the value of IRAs and take advantage of the government’s desire to encourage you to look after yourself in your old age. IRAs allow you an option to invest over and above what your 401k plan may allow.

A Roth 401k is very similar to a Roth retirement plan. You make your saving contributions after you have paid tax on your earnings. So whether this is the right retirement income generator for you, depends upon your tax bracket and the timing of your retirement, both of which you need to keep under regular review. The earlier you start the less stress you will feel come retirement age. The earlier the better, begin planning and saving for your retirement. It is never too late to start to get started and build a portfolio to meet your needs.