401K advice???
My company offers a 401k plan through ING.I'm a 35 yeal old male with no kids.No savings or investments for future retirement either.I have until the 30th for this cycle to decide percentages and types of investments to get involved in.I earn $800-1000 per week pretax.Any advice to get me going in the right direction???
Public Comments
- Definitely take advantage of your company's 401k program. If your company allows you a certain percentage to put in, go for the max if you can. Mine allows me 20% and then matches 10%. Its never to late to start. If they offer stock purchases, make sure you take advantage of those too. You usually are able to buy at a lower price but of course you might have a minimum amount that you have to keep them before you sell. If you can decide diversify your 20% you invest. You might do 25% in large cap stocks, 25% in small cap stocks, 25% in international funds and 25% in bonds. These have to add up to 100%. Some 401k's actually have Life Cycle funds that are a diverse portfolio. They are based on a retirement time frame. If I retire, it will be in 2020. So they actually have a Lifecycle 2020 fund. As you get older, you should take less risks. But you are in your peak earning years still so make this money count toward your retirement.
- I'm no financial genius but we put in the percentage that the company matches because that is "free money". Our company matches up to 5%. Find that out first. At your age, with no personal financial obligations, I would go as high as I could because (there is a limit per tax year you can claim off your taxes though) in a few years you could use some for a down payment on a house, Real Estate is THE best investment, even if you owned it only for w few years and sold it, some property gains as much as 20 to 30 grand in a few years which is also free money you can invest. I wish I would have started a 401k earlier at your age.
- Contribute as much as you possibly can. At the very least, contribute your raise percentage--you'll never miss it since you never had it before. Make sure to contribute to the level that the company matches. A higher level is better if you qualify, but the most important is to get the free money the company matches. You're young, so go with investments with a moderate level of risk.
- contribute as much as you can to get the full company match. at 35, put your money...all of it into a stock index fund..the sp 500 is excellent. stay clear of company stock
