Since the laws have changed, there has never been a better time to start a 401(k) retirement fund. In fact, you may already have one because, under the new law, your employer can automatically put you into a 401(k) retirement fund.
If that happens to you, or if it already has, you might not be happy at first because it will take some of your salary to pay it. But trust me, any investment you make for your retirement is a good one. If you haven't already, start one today if you haven't. It's that easy.
The law has also changed so that the Roth 401(k) is now always available. The main difference between a Roth 401(k) and a regular one is that you invest money that has already been taxed, but you don't have to pay taxes when you take it out. When you put money into a 401(k), you don't have to pay taxes on it, but you do have to pay taxes when you start taking money out.
401(k) or 401(k) Roth? (k)
Which is best? That depends on your situation, and you should talk to a good financial adviser about it. If you make a lot of money and will pay a lot of tax on your retirement income, you may do better with a Roth 401(k). However, this may not be the case for you. It depends on how much tax you pay now and how much you expect to pay in the future.
Once you have a 401(k) retirement fund set up, you need to put some money into it. This will pay off in a big way. Most people just put their money in one fund and forget about it. Then, after 30 years, they may find that it hasn't grown as much as they thought it would.
Check your money once a year.
Review your fund or funds every year to keep this from happening to you. Find a good financial advisor who puts your needs first if you don't know how to do it. You need someone to explain the costs of each fund, compare them, and suggest that you invest in more than one. Putting all your eggs in one basket is never a good idea, and this is especially true when investing for retirement.
Whether you use a financial advisor or not, you should look over your 401(k) every year. Also, keep in mind that if you use a financial advisor, he or she will charge you in some way for the service they provide. You need to know how they are charging you. It might come out of their commissions, which is not a good way, or they might charge you a fee.
You don't need a financial advisor if you can keep up with mutual funds and investments on your own. It's not that hard to learn.
Disclaimer
The information on this website does not in any way represent an offer. It tells you some general things, but it is not financial advice. The goal is to help you decide what to do with your retirement plan and to show you how important it is to save for your golden years. Before setting up a retirement plan, you should talk to a retirement planner who has a good track record.
