Your company 401(k) is a big deal. It can be the most effective vehicle by which you save and build wealth for retirement. Chris Hogan, author of the book Everyday Millionaires, surveyed 10,000 people with a net worth of more than $1 million, then looked at characteristics that would explain their success. He found, contrary to popular belief, the 10,000 were ordinary people who built their wealth slowly through mutual funds, IRAs and company 401(k) plans.
Here's a list of ways NOT to utilize your company 401(k):
Do NOT contribute
If your company offers a 401(k) and you don't contribute, plain and simple, you're missing out. Remember, slow and steady wins the race. This mantra applies to a 401(k) where a portion of your check is taken-out before you receive it and put into retirement savings - week after week, month after month, year after year. By the way, your company may offer a match! So, if you're not contributing you're leaving free money on the table.
Do NOT be intentional
If you are contributing to your company 401(k), great! But, make sure you're paying attention. Know the funds to which your contributions are being distributed. Understand your risk profile. Too many people turn their 401(k) on "auto-pilot" meaning they set it up once and rarely, if ever, look at it again to make changes or adjustments.
Do NOT hire a professional
A professional retirement planner can give you regular 401(k) "check-ups". They can make sure your contributions are balanced correctly with the appropriate amount of risk for your specific situation. A retirement planner can look at the entire retirement plan as well. Remember, your 401(k) is a very powerful tool, but it is only one part of the retirement strategy.
Need help making sure you are properly utilizing your 401(k)? I'd be glad to answer any questions you may have.
Email me at email@example.com or call 320.222.4236.