3 Worst Mistakes Most People Make With Their 401(k) – And How to Avoid Them
I have some bad news. Planning for retirement is a lot harder today than it was for our parents.
The even better news is it’s really not as hard as you think to be light years beyond your peers when it comes to saving and investing for retirement. Read on to find out how!
This is referred to as a “defined contribution” plan, as opposed to the “defined benefit” pension plans of the past.
What Is a 401(k)?
Most companies also give a company match to incentivize you to contribute to your account. This is essentially free money, just for participating in the plan.
How does a 401(k) Work?
You must at least contribute enough to get the company match. As stated above, this is FREE MONEY! It doesn’t get much better than that.
Mistake #1: Not Getting the Company Match
Owning 100% cash is a guarantee of a loss year after year once you take inflation into account.
Mistake #2: Leaving your Contributions in Cash
The secret comes down to fees. Actively managed funds have to pay all those geniuses who sit around and pick stocks all day.
Mistake #3: Paying High Fee
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