Investing in a 401(k) plan is a necessity these days. You need to ensure that you have a retirement plan in place so that you’re not struggling and trying to scramble to pay for basic needs like food, housing, and transportation. Surprisingly, however, many Americans are without a retirement plan and a 401(k). Don’t be a statistic — take action for your future.

401k

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1). Not participating in your employer’s 401(k) plan. You definitely need to take advantage of this program if your employer offers it. Having a small percentage of your salary earmarked and automatically taken out of your paycheck is more non-threatening than having to actually sign a check and send it in.

Having a plan through your employer is easy. Once you sign-up, you don’t have to think about how you’re going to save up for your retirement.

2). Not taking advantage of employer matching program. This is free money and it’s ridiculous to ignore this popular option. If you contribute 5% of your paycheck every pay period to your 401(k) plan, your employer may match it up to 50%. Some employers may even offer a 100% match, adding 2.5% more into your 401(k) plan.

3). Forgetting about your plan. This is something you need to review at least every month. Know what’s going on with your money. Make sure that your specified deposits are being made and that no suspicious activity is going on.

It would be tragic if you went about your routine for three years and then finally checked-in on your retirement plan, only to discover that your account was not being credited properly.

4). Relying only on the company’s stock as funding source. If your company has a 401(k) plan that has different investment options, take advantage of it. You need to diversify your allocations and wisely make investment choices. Putting all your eggs in one basket could be detrimental.

5). Tapping into your 401(k). Your 401(k) should not be touched. This is money that you are working hard to put away so you can retire and enjoy the fruits of your labor. If you withdraw money from this account, you can be hit with steep penalties and you can eventually squander your savings and not have anything left over.

6). Underfunding your account. It’s not impossible to put more money into your 401(k). Instead of thinking of it as a monthly contribution, break it down into weekly increments. Try to eek out another $5 every week, which will amount to an extra $25 every month.

$10 every week will net you $40 every month, and that’s an extra $480 into your 401(k). Retirement is a stage of life you should be eagerly planning for now. If you haven’t started a 401(k) plan yet, it’s never too late. The more money you start investing now, the more money you will have in the future. If you have any problems or questions, ask your company’s 401(k) representative or a financial adviser.

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