How to Set Up Your First 401k

  

Hiring into a new job can be scary and sometimes overwhelming. Once been hired on by a new employer they'll have to sit you down with a financial adviser to help work you through the company 401k plan. The employer will also be there to assist in transferring your 401k from your previous job, which is much safer than cashing out all together. Make sure to take advantage of these meetings and go into them prepared with a list of questions.

There's a lot you should know when it comes to safe harbor match 401k , especially if you're setting up a new plan. When deciding on a 401k plan the company should have a financial adviser, which will be helpful, but you should do your own research and ask all the questions you can think of. There are a few things you need to understand when it comes to your 401k, and how to properly manage them. You need to know your goals and what you're looking to achieve when deciding on a 401k plan. If you happen to be younger, then it might be wise to be a bit more aggressive and stick with purely stocks.

When you're aggressive it also means you're risky. The concept of risk is a tough, but you might want to pick a plan that's on the riskier side and relies more on a well diversified stock portfolio that doesn't focus on bonds. Bonds and CD's are safe and more secure, but not always the right choice. When your money is in the stock market there's a chance that you'll make a lot more money. As opposed to a plan that is mainly invested in bonds or CD's, which are safe bets. If you happen to be older and supporting a family then you may want to steer towards a plan that's focused about 50/50 with stocks and bonds, because there's no risk. This gives you security with minimal risk to your retirement investment, but no risk usually means no reward, and sometimes you need the risk. To learn more about small business, visit http://www.huffingtonpost.com/topic/small-business .

Be sure to look at how each plan has performed over the last few years and understand where the stock market is in terms of highs and lows. When looking at market trends it's important to know if stocks are at an all time high, because the only one place to go is down. Make a meeting and speak with a financial adviser, who should be a fiduciary who works in your best interest, that the company provides as they should be helpful. Advisers like these should be able to give you a few ideas as to what you should be doing. Advisers should let you know how well your plan is performing and how much they feel you should be investing from your weekly paycheck.

401k plans that are provided by your company are pretty standard and everyone should take advantage of them. Make sure to match the percentage of what the company puts into your 401k because if you don't you'll be missing out on what is essentially free money. 401k's are nice, but they aren't pensions, so there is always a possibility of risk, but you need to embrace the risk to get the best rewards.

You need to understand that the market fluctuates and has highs and lows, but the average trend should always be in the positive. The main goal of your erisa 338 plan should be to match the market in the long term, this comes with ups and downs. It is very hard, if not impossible, to beat the market every year. Even when it comes to actively managed plans, which are more costly, they typically only match the market in the long term.